Asset-backed financing of management buy-outs (MBOs) is set for a bumper year as small companies struggle to attract funding, while mid-market private equity houses at the upper end are also switching on to the asset class.
While the venture capital (VC) and private equity (PE) communities race up the transaction value chain and struggle to match opportunities with investment, the gap that is opening up below is proving lucrative for asset-backed finance lenders, who are experiencing a deal flow VCs can only dream of. "We completed 30 deals in 2002, which is a 100 per cent increase on 2001. We have been growing at this rate since we started four years ago, and at the moment are looking at two or three deals a week," comments John Bagley, deputy managing director of NMB Heller.
