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Negotiating the exit

Ross Butler, director at Ten50, looks at the consequences for private equity of the different interpretations of Brexit.

Every cloud does seem to have a silver lining for managers of self-terminating fixed-life private equity funds. Financial crisis? “The perfect buying opportunity”. Asset bubble? “Time to sell”. Credit dearth? “Buy for less, refinance later”. And, when it comes to deals at least, Brexit is no exception.

Many private equity managers see the uncertainty as a chance to push down ‘toppy’ acquisition multiples.

And, if the economy holds up better than expected, that’s fine too. Larger international private equity players with euro or dollar funds are also bullish, viewing British assets as a foreign exchange opportunity, perhaps even with the weakening of sterling, within reason. Those investing to financially engineer infrastructure, and larger stable assets are less welcoming of the uncertainty.

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