UK activity up

The UK can expect to see a significant upturn in UK private equity activity in 2006, according to PiCapital, with healthcare, media and leisure tipped as the hottest sectors. This is the view of PiCapital’s around 250 private investors, who were polled for their views earlier this month.

About 60% of the respondents thought private equity investment, fund raising and exits would all be up significantly in 2006, while close to 40% tipped healthcare, media and leisure as the likely hottest sectors.

PiCapital members include Stuart Rose, Sir David Frost, Brent Hoberman, John Moulton and Will Hobhouse. The estimated investment firepower of PiCapital members has been put at between £3.5bn to £10bn. Members were also polled in a survey on the outlook for key UK economic indicators in 2006, with a response rate of close to 50%.

Some 60% of respondents thought UK GDP growth would continue to be weak, at about 1.75%, in 2006, with close to 25% believing that the UK will register 2% growth, only just managing to beat the UK Chancellor Gordon Brown’s projected growth rate of 1.75%. Members stated factors such as high oil prices, rising utility bills and higher taxes (largely council tax) would all have a negative impact on the economy.

David Giampaolo, CEO of PiCapital, said: “We are looking forward to an even busier 2006 after a great year in 2005. Although we continue to focus on financings for SMEs, getting access for our members to such big deals as the Fitness First and Gala transactions has strengthened our reputation and will certainly help to drive new deals this year. Increasingly, companies are looking for additional value beyond just capital from their private equity provider and this is what PiCapital can provide through our influential membership network.”