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Investors are likely to be increasing their spending in the technology, media and telecom (TMT) sector this year despite fears of a recession, according to a new report.

The majority (86 per cent) of those surveyed by corporate finance specialist Cobalt revealed that they are expecting to invest similar or greater amounts than they did last year.

The firm, which questioned more than 100 people managing investments totalling some £40 billion, also found that 95 per cent believe their investment sizes will be at least similar to those made in 2007.

Interestingly, more than 80 per cent claim that the proposed changes to capital gains tax will not alter their appetite or investment structures, with almost a third anticipating expanding their TMT teams.

But those surveyed believe it will be harder to find successful exits, with 90 per cent implementing measures to counter the negative macro shifts and credit problems.

The report revealed that this will lead to 39 per cent of respondents delaying their exits, with 13 per cent changing their disposal plans from an IPO to a trade sale.

A report compiled by accountancy firm Baker Tilly confirmed that markets, such as AIM may not be TMT friendly this year. The firm’s 12th Taking AIM survey discovered that the technology sector had dropped to the bottom of the list of preferred investment sectors, despite being favoured in last years report.

Cobalt founding partner Paddy MccGwire said the findings are encouraging and reinforce his belief that M&A activity is continuing, albeit cautiously. “The private equity industry has considerable amounts of money to put to work, hence its appetite for increased investment activity. We are still seeing many entrepreneurs looking for a sale or MBO so the deal flow is there, but the variance in value expectations is growing.”

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