When Will Deals Come Back? Four Buyout Pros Answer

At The Deal’s 2009 PE Outlook Conference in New York, a panel of PE players were asked when they think confidence will return to the market. Their answers ranged from to optimistic to just plain depressing. Here ya go:

Martin Mannion, Summit Partners: The time is now. With discipline, we are seeing the confidence to do deals now.

Jonathan Colby, Carlyle Group:
It will probably be the second half of next year before we see any real activity.

Nicole Arnaboldi, DLJ Merchant Banking Partners: It’ll be a multi-year crawl back that will start in the middle market.

Bruce Bowden, Head of M&A, Nokia: The end of this year will be a disaster, and for anything to start looking up, we’re going to need a sign. It could be late into next year.

The “second half of next year” sentiment was certainly reminiscent of something I’d heard before, say, at outlook conferences at the end of last year! Let’s hope this time they’re right. The panelists also had thoughts on the Obama administration’s role in confidence-building, bailouts, HSR, and the Big Three.

Arnaboldi said the government will need to be clearer about its plans for companies receiving bailout money. “You can’t buy a company that would compete with a government supported bank,” if you don’t know the plan and direction it’s taking, she said. However, she said she thinks even the new administration will be relatively hands-off with the bailed-out banks’ operations. Except in the case of highly sensitive, high profile things like events and bonuses.

Colby said it’d make no sense for the government to isolate its bail-out efforts to the financial services industry. “Why just bail out Wall Street?” he said, when other industries are suffering as well. He added that this bailout will put Wall Street under a giant microscope by the new Congress.

Mannion of Summit Partners echoed that sentiment: “It’s easy to say, ‘Let the Big Three go under,’ but that move would lead to a 1% job loss.” He said the auto industry could benefit from the private industry strategy to improve its long-term prospects, along with the government funding, which would help in the short term.