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Private equity investments hit Natexis Banques Populaires first half results

A deterioration in private equity returns hit an otherwise steady set of first half results from French investment bank and asset management firm Natexis Banques Populaires.

The group said the contribution from its private equity interests to first half net income was down 75 per cent on the first half of 2001 and down 30 per cent on the second half.

‘Private equity, which was a strong contributor to earnings in 2000 and the first half of 2001, has performed significantly less well over the last 12 months, in common with all other market players,' the bank said in its first half release.

‘Private equity is, by nature, a volatile business, as profits hinge on the ability to realise capital gains accumulated in the portfolio, which in turn is partly dependent on stockmarket performance,' it added.

The firm said total net banking income in the first half is expected to have reached E900m, up 2.3 per cent on the second half of last year but down 6.2 per cent on the first six months. Private equity is expected to contribute about E20m to investment banking net income.

Sharp falls in stock markets have badly hit private equity investors in recent months. Exit opportunities, already limited, continued to wither throughout the first half of this year, which is depressing investment activity.

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