PE leaders voice worries

PRIVATE equity leaders said their industry could take years to return to blockbuster buyout deals yesterday, as funds shrink and deal numbers come back to earth in the wake of the financial crisis.

Lionel Assant, Blackstone’s senior managing director in private equity, told the annual summit of the British Private Equity and Venture Capital Association (BVCA) that $20bn (£12.8bn) deals may be gone for good.

“Today volumes are lower – we will see big buyouts again, but I don’t know if it’s in one, three or five years,” he said.

Stefano Pessina, executive chairman of private equity-owned Boots said Western nations are paying the price for the “disease of debt” and warned that anxiety over the financial crisis risks many more years of stagnation. He said people and governments were living in denial about the scale of their problems despite sweeping deficit-cutting measures across Europe.

“The disease of debt has gone too far and we must find a cure. We should accept the fact the cure is not going to be easy... It will be very painful and we will risk years of downturn – although personally I am not a believer in a double-dip [recession].”

Pessina, who took Boots private with KKR for £11bn in 2007, said the pharmacy was in the best condition in its history but otherwise struck a gloomy tone in a rare public address at the summit.

Success depends on a balance between investment and cuts, he added, urging nations to tackle their debt and look to the future. “We have to move ahead and have to become more optimistic about our future which, for the time being, is not happening,” he said.