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CFOs in PE less optimistic than 2011

After revenue growth, protection of margins through cost-cutting is the 2nd priority for CFOs in PE

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Finance chiefs at private equity-backed businesses are less confident about revenue growth than a year ago, adding further pressure to the government’s plan for private business to offset austerity measures in the public sector.

A new study by Deloitte showed on Monday that the number of CFOs that are optimistic about revenue growth - the top priority - over the next 12 months, fell to 54 percent from 70 percent a year ago.

The second priority for CFOs over the coming year included the protection of margins through cost-cutting.

There are fewer plans to exit a business in the next 12 months due to market uncertainty, the study showed, with only 4 percent saying they were going to sell a business, down from 18 percent the previous year.

An initial public offering as a possible exit route would only be considered by 4 percent of those polled this year, compared to 17 percent last year, marking the biggest fall, compared to other routes. A trade sale would be the most popular route for CFOs or a secondary buy-outs to another private equity owner.

“The results of the survey very much reflect current market sentiment and we have seen a dip in the overall outlook for the coming months,” said Emma Cox, lead partner for Deloitte’s private equity-backed business team.


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