BusinessCorporate FinanceIMF sounds private equity alarm

IMF sounds private equity alarm

IMF warns that mushrooming private equity activity risks dealmaker meltdown

The International Monetary
Fund
has warned that the current level of private equity deal
activity is so extreme that there are risks of matching the worst excesses of
earlier
M
&A booms
.

The IMF warned that insatiable investor demand for private equity investments
has resulted in over-inflated deal valuations, and left companies financially
vulnerable and saddled with too much debt.

According to
The Times
, the IMF also warned that private equity players are also
exploiting demand for a share in their deals in order to obtain weaker financing
conditions from their investors.

Investors, meanwhile, may be failing to properly assess private equity deals
as thoroughly as they should in the rush to obtain stakes in buy-out deals.

‘The recent wave of M&A is exhibiting some worrying symptoms of the past
and has introduced some new risks,’ the IMF said in a report.

Further reading:

Rake called up to aid private equity image push

Private equity’s silent partners

Private equity chiefs face up to tax review

Related Articles

Grant Thornton recruits new corporate finance partner

Accounting Firms Grant Thornton recruits new corporate finance partner

9m Emma Smith, Managing Editor
Total fraud value at £2bn five-year high, finds BDO

Accounting Firms Total fraud value at £2bn five-year high, finds BDO

9m Stephanie Wix, Writer
MHA MacIntyre Hudson appoints corporate finance director

Accounting Firms MHA MacIntyre Hudson appoints corporate finance director

9m Stephanie Wix, Writer
Tax avoidance crackdown sees 80% jump in additional HMRC revenue

Accounting Firms Tax avoidance crackdown sees 80% jump in additional HMRC revenue

9m Stephanie Wix, Writer
Making Tax Digital: the "unexpected item in the bagging area"

Accounting Standards Making Tax Digital: the "unexpected item in the bagging area"

10m Stephanie Wix, Writer
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

9m Stephanie Wix, Writer
KPMG announces senior partner promotion in Newcastle

Accounting Firms KPMG announces senior partner promotion in Newcastle

9m Stephanie Wix, Writer
Independent city firm reports 70% growth

Accounting Firms Independent city firm reports 70% growth

9m Stephanie Wix, Writer