Dutch bosses welcome private equity

Some 60% of Dutch company chairmen are positive about the emergence of venture capitalists, while 30% see private equity as being too focused on short-term profits.

This is the conclusion of the latest KPMG survey on mergers and acquisitions.
The value of deals involving private equity has risen from €54m in 2003 to €362m last year, KPMG says. Some 130 bosses at listed and non-listed companies took part in the survey.
‘While the number of transactions has stabilised at around 25%, the average value of each transaction has reached unheard-of levels,’ KPMG’s Jurgen van Breukelen said.
Private equity accounted for 57% of the value of mergers and acquisitions in the Netherlands last year, compared with just 15% in 2003.
Speaking the survey’s presentation, Wavin chairman Philip Houben said: ‘there is life after the locusts’, referring to the popular image of venture capitalists.
The pipe-maker was sold to CVC by Shell in 1999. ‘At that time Wavin had an identity crisis and that is the perfect hunting ground for private equity,’ he said. Wavin was re-listed on the Amsterdam stock exchange last year.
The KPMG survey also showed that Dutch firms made 216 foreign acquisitions last year, almost double the 2005 figure. However the number of takeovers of Dutch companies was relatively stable at 145.
Meanwhile, the Financieele Dagblad reports that ABN Amro boss Rijkman Groenink is one of the those requested to appear before a parliamentary hearing into the role of private equity and hedge funds in the Netherlands.
The bank is currently under fire from shareholders who want to see the bank split up or units sold off. The hearing is scheduled for April 11.
Others on the invitation list include hedge funds Centaurus and Paulson, which put engineering group Stork under siege, plus the Dutch central bank, financial services sector watchdog AFM, unions and academics.
On Wednesday the Dutch central bank said it was drawing up guidelines to help counteract the risk of investing in private equity firms. It said pension funds and other institutional investors underestimate the risks of investing in buy-out funds.

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