The cutting edge of venture capital

The leveraged buy-out market is taking off in Europe this year. More investors are pouring more money into more bank funds and venture-capital firms. And the number of attractive buying opportunities is multiplying as European corporates, spurred on by impending European monetary union, begin to focus on core activities and sell peripheral businesses in order to improve shareholder value. The major players are brimming over with enthusiasm. "If you don't need much sleep, this is a great time to be in leveraged buy-outs. There are enough opportunities to do business 24 hours a day," says Charles Wickham, managing director of European leveraged finance at Merrill Lynch.

Complications

But there some complicating factors to the boom. Prices being paid for all types of businesses are high, buoyed up by a still-bullish stock market, so it's hard for a financial buyer to achieve the phenomenal returns investors have come to expect. Venture...