MBOs soar while start-up investment remains low

02/01/07 00:00

Data collected annually by Corbett Keeling shows that it was a record year for MBOs with deals both large and small receiving the backing of private equity firms.

Larger buy-outs (€150m plus) reached record levels and the total value of deals was over €30bn spread over 48 investments.

Also, deals in the sub-€150m category valued at over €6bn last year with just under 150 separate investments being made.

However, investors have still not come near to regaining their enthusiasm for early-stage investment which they displayed prior to the dotcom bubble collapse in 2001.

Investment in start-ups was below €2bn last year, one of the lowest levels recorded by the survey in the last ten years.

However, Simon Keeling, chairman of Corbett Keeling, says that he doesn’t expect the low levels of private equity investment to have a big impact on the UK economy as a whole.

He told Growing Business magazine: “This has been the state of affairs for some time now, so I don’t think it’s going to have any dramatic effect on the economy.

“Ever since the dot.com boom there has been a lot less start-up capital but there is still money going into early stage companies through channels such as the government’s regional development funds.

“I think it might be a better year this year as I think there is a sort of sense that the big investment institutions are more willing to put money into start-up funds now than they have been for the last few years.”