Private equity investors in the UK have raised their expectations for high tech company valuations in 2011, according to finance and business advisor Grant Thornton UK.
The firm’s Private Equity Barometer, which gauges the sentiment of 100 private equity executives quarterly, reveals that expectations of multiples increased by 18 per cent in the last quarter, making high-tech the strongest sector in the UK economy.
However, the number of respondents who expect to be most active in this sector fell slightly with 29.3 per cent expecting a busier 12 months ahead, compared to the 30.3 per cent expressing the same sentiment in Q3.
Duncan Lamb, technology director at Grant Thornton, said: "It provides positive news that private equity investors still deem the sector an active target for 2011 and that the investor community is expecting multiples to rise again.
"2010 saw private equity groups making their return to the technology sector and this activity has helped it recover from the recession better than most. Companies that provide specialist knowledge, particularly within software, have become hot property in the technology sector and PE investors will be looking to bolt on such businesses to build on their capabilities and better compete with niche players.”
