2011 Extract of the Chairman's statement
After achieving stabilization in 2010, our company consolidated its activity during 2011. The portfolio matured further and generated substantial cash flows during the first part of the year. The operational set up is unchanged, and there was continuity at the board and management level throughout the reporting period.
The recovery in the private equity markets which occurred in 2010 and continued well into summer 2011 enabled the industry to register substantial investment and exit activity. After the summer, deal activity experienced a strong decline, notably in North America and even more so in Western Europe. These markets traditionally use substantial amounts of leverage and therefore were more impacted by increasingly restrictive bank lending. The market developments were reflected in our investment portfolio with reduced exits during the fourth quarter of the year, although exit activity was good due to transactions structured or launched before the summer break.
The current outlook for the private equity market is uncertain, and activity in mature markets (where APEN has the vast majority of its investment exposure) remains at low levels during the initial months of 2012. Moreover, the majority of the underlying portfolio funds are expected to be in a har - vesting period during 2012. As a result we expect investment activity to decrease fur ther during 2012. At the same time, exit activity in mature markets is at a low level for the time being and it is unclear when the exit window will reopen. Investment activity cash flows during 2012 are thus expected to be lower than in 2011.
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