Guy Hands, founder of private equity group Terra Firma, is eyeing "substantial" deals and expects European governments to speed up selling off state assets as the economic recovery gains momentum.
Hands, who is chairman and chief investment officer of the group, said he was eyeing deals that have a large quantity of assets, but are looking cheap relative to pre-credit crunch valuations.
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"I think it really depends what area of the market you're in. The area we're in the market, which is really deals which are very substantial, which have a large quantity of assets in them, are still substantially below valuations from 2007 and still have quite a long way to go," he said.
Hands, who has overseen more than 30 transactions in the last 20 years with Terra Firma including the unsuccessful £4 billion takeover of record group EMI in 2007, said he expects privatizations in Europe, but perhaps not quite on the scale that was seen in the 1980s and 1990s.
"We're not really in a situation in the 80s and 90s where governments were selling things that could be seen as crown jewels or very separate whereas now we're doing much more complicated privatisations," he said.
"But I think some of them could be very interesting and very attractive," he added.
Hands said he is very positive on Europe, describing it as the "place to invest in at this time".
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Core Europe, along with the U.K. are Hands' preferred areas as he believes the region's approach in tackling the recession is more sustainable long term than the U.S..
European problems are much more "observable", he said adding "the U.S. problems are in the future but they're major problems."
"Europe is an upside iceberg with most of its problems on the surface and the US is an iceberg," he added.
The financier also predicted interest rates in both Europe and U.S. will stay low for the next two to three years.
—By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave