Private Equity Firms Call For Government Bail-out

摘要

Private equity firms with significant public sector interests have revealed heavy writedowns, raising fears of bank takeovers.Several big names in the finance sector have warned the City they have been forced to downgrade investments to a zero value, raising the prospect of banks stepping in.Private equity firms take over companies and improve their performance before selling them on for a return of around 25%. But in the current economic climate venture capitalists will have to consider pulling the plug on some companies.They would have to sell, call in receivers, allow a management buy-out or hand them over to their banks.The lack of credit and the wider recession has hit private equity hard. The total value of European private equity-backed transactions fell 59% in the final quarter of 2008 to ￡8bn.Major firms have revealed dismal results. One of the biggest, 3i, has revealed the value of its top 50 investments fall 21% in the last quarter of 2008. It owns Enterprise PLC, which provides outsourced maintenance services to the public sector.