HgCapital boss expects private equity deal rise

The private equity market is moving into a period of many more deals after nearly two years of inactivity, according to Ian Armitage, chairman of the £2.4 billion HgCapital.

"There are a lot of private equity firms out there with a lot of cash which they must invest over the next 18 months or lose," said Armitage.

"By the end of 2010 we were seeing a healthy, two-way market which had almost disappeared in 2009 and early last year."

HgCapital Trust, the listed investment trust which allows punters to follow Hg's fortunes, produced a total return of 23% last year, beating the FTSE All-Share Index by 8.3%.

Armitage expects to see the group sell on many of the investments made in Hg's 2006 fund as the companies are now performing strongly and profitably. Recent sales have seen companies sold by Hg at considerable premiums to the values they appear on the books.

At the same time, last year was a record one for new investments with £111 million going into seven buy-outs and renewable energy projects.