Buyout houses found the UK a frustrating market in 2006. There is little reason to expect a change in 2007.

Investors in emerging Europe have reaped the benefits of a rapidly maturing market over the past 12 months.

Spain was the third-busiest market for mergers and acquisitions in the world last year, after the US and the UK. Completions jumped 70 per cent year-on-year, according to Dealogic figures, boosted by deals such as the £10bn (€15bn) acquisition of UK airport controller BAA by Spanish construction group Ferrovial. Beneath the mega mergers, private equity saw its fair share of action.

The ever-growing popularity of collateralised loan obligations is a sign of increasing complexity in the leveraged finance market.

Despite huge regulatory uncertainty going into 2007, and damning research that shows the region as among the worst for structuring deals in Europe, Germany’s investors are bullish about the coming year. It seems that the scale of the market opportunity skews all the odds in private equity’s favour.

With internet sales over the 2006 Christmas period up more than 40 per cent on 2005, according to preliminary figures, it’s clear that the dreams of e-tailing we heard about in the early part of the century are coming true. Only it’s panned out a little differently than expected.

Easy returns from healthcare businesses are history. With sky-high pricing, investors are digging ever deeper to find the right deal.

If there was a strategy designed for support services, it would be buy and build. With companies looking to increase the number of services they offer clients, sometimes in highly fragmented markets, or to expand geographically, the sector is not short of mergers and acquisitions activity.

The huge growth in complexity of LBO structures will make restructurings painful for all parties, but especially private equity.

With conventional methods drying up, retailers now need to look to brand differentiation and overseas expansion to boost revenues.

The Dutch financial markets are buzzing with news that the region’s leveraged buyout record might soon be broken for the second time in less than 12 months.

Roll-outs have been the strategy of choice for most private equity houses: as a means of creating value, they are hard to beat.

Soaring multiples in the healthcare sector have aroused the interest of all types of buyers. Private equity must now compete for deals with some unconventional investors.

It has long been said that the three most crucial factors in a deal are management, management and management. That is just the case with support services deals, only more so. In this sector, successful businesses are “people” businesses.

Borrower-friendly terms give sponsors control. But if it comes to a restructuring, they stand to lose everything.

The combination of a credit crisis and continual falls in high-street spending is making debt financing an elusive beast.

The French private equity industry’s day of reckoning is fast approaching. On 6 May this year, Nicolas Sarkozy, former finance minister and long-time champion of free market reform, will go head to head with France’s first female presidential candidate, the dedicated socialist Se´gole`ne Royal.

A top-quality management team is crucial for maintaining a care homes business, but finding the best people is getting harder.

Support services businesses can no longer presume to ride the growth curve that has carried the sector so far in recent years, or to rely on an endless stream of lucrative government contracts to ensure their success.

Cross-border restructuring presents a multitude of problems, and as more businesses globalise, the situation will get worse. Changes are afoot across Europe to reform the insolvency process.

There’s no doubt that the retail sector is in for a rough ride in 2008, but certain areas will be insulated from the rash of profit warnings and insolvencies.

Once you’ve read this supplement, file it away somewhere safely. It could become to the buyout executive what the May 2000 edition of Red Herring was to technology venture capitalists.

So far technology M&A has been relatively unscathed by the credit crunch. But bad news could be around the corner.

If there was a big year for private equity in the retail sector, 2004 was it. A handful of private equity houses, primarily in the UK, had steadily been building their retail exposure – a sector that had been considered too risky and reliant on the whims of consumers.