Finance & Business World

U.K. private equity executives are at their most pessimistic in five years about takeover activity amid a drought in buyout loans, according to a survey of executives by the accounting firm Grant Thornton LLP.

Almost two thirds of the venture capitalists polled expect a decline in the number of takeovers completed in the next 12 months, compared with 10 percent expecting a fall a year earlier, Grant Thornton said in an e-mail today. Firms are also putting asset sales on hold and waiting for the economy to improve so they can reap the profit they originally targeted, according to David Ascott, the accounting firm's head of private equity.

The surge in U.S. subprime mortgage defaults has roiled the credit markets that private equity firms depend on for the loans to finance deals free instant credit score estimator. Banks are still clearing a backlog of unsold buyout loans that peaked at $350 billion last year. At the same time, a slowing economy makes it harder to find buyers for investments made before the credit crunch.

“There have been many private equity deals caught out due to the credit crunch and rapidly changing economic situation,'' Ascott said. “Business values have dropped and certain sectors face a tumultuous short-term outlook.''

Grant Thornton polled 100 British firms on May 15.

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