What is the view on valuations and stage of the PE cycle in Europe?

December 12, 2018
by a searcher from IE Business School in 28045 Madrid, Spain
One US searcher who bought his company at start of 2017 tells me he thinks the market is now crowded and there are too many funds competing with micro PE over the same low quality deals. He feels it is prohibitively late in the cycle for search funds to make sense right now in the US.
This tallies with conversation with a guy who had raised a small PE fund over the last couple of years who said he has had to return money to investors, as he just feels valuations are too frothy right now.
Do you agree? Is it different in Europe vs US? Is now a bad time to be buying but maybe a good time to be raising?
from Babson College in Portland, ME, USA
I can't add much on Europe. A small distressed hedge fund that I was principal of did invest in the UK and I can't say I ever felt the space was less crowded than the U.S. But that was just my gut feeling.
from IE Business School in 28045 Madrid, Spain
Perhaps every deal is so idiosyncratic that broader frameworks are difficult to use but would be interested to know if the institutional investors in the space perhaps use rules of thumb linking growth trajectory to different levels of multiple, where their "red lines" are at this point, whether these have evolved over time and the reasons for that evolution etc.