News analysis
Heading for a winter workout?
As summer draws to a close, and the August lull is quickly forgotten, the private equity market is once again focusing on whether a spate of defaults is around the corner. This speculation has been underway since early spring when the received wisdom was that year-end would yield a crop of restructuring and workout situations. So far it’s just been the odd difficulty. Lisa Bushrod reports
Secretive, greedy, asset-strippers: private equity and the press
“A spokeswoman for Permira declined to comment. UEE wasn’t immediately available for comment. A spokeswoman for Carlyle Group declined to comment. A spokesman for Bain Capital declined to comment, while Macquarie and Wesfarmers couldn’t immediately be reached. No one at Industri Kapital was immediately available to comment.” A situation like this (which actually happened in European Buyouts Daily in August) is a journalist’s nightmare, but it’s one that is all too familiar to those who write about private equity. In general, private equity is not given a great press by the mainstream media (ie not the trade press), and it’s regularly portrayed as secretive and ruthless in its pursuit of profit. Tom Allchorne reports
Hedge funds: a good fit?
An increasing number of private equity funds are choosing to expand beyond their historical investment strategies. The last few months have seen private equity groups GSC Partners and Summit Partners both demonstrating a commitment to investing in hedge funds following in the footsteps of larger funds such as Blackstone, Cerberus and Fortress, which have all launched hedge fund offerings as an extension of their business line. Many managers view this as a natural step to becoming alternative asset managers and a way of attracting more funds. From the institutional investors’ point of view such a mix can be all the more appealing given that the less liquid private equity portfolio can be offset by the more liquid hedge fund investments. Angela Sormani reports
That time of year again
At this time of year a great many European venture capital and private equity firms are gearing up for annual investor meetings that take place through the autumn. And although some have moved to a different time of the year, but not to coincide with the late spring concentration in the US, European GPs say they are mindful of their institutional investor’s (LPs) schedules when setting dates for these annual general meetings going forward. Lisa Bushrod reports
A chip on the shoulder
According to a recent survey, 80% of UK corporate advisers think price chipping is a problem with all private equity firms. This is a significant number, so it comes as no surprise that the industry has something of a reputation for reducing the price agreed on. Granville Baird, the UK mid-market firm, commissioned the survey to find out whether this perception was justified and what can be done about it. Price chipping is apparently now so widespread that firms will actually outbid their rivals to win the deal with the intention of haggling the price later on. Once a transaction reaches this point, it becomes difficult to walk away, hence the reason given by respondents as to why buyers chip: ‘because they can.’ Tom Allchorne reports.
ABN AMRO’s surprise acquisition
Healthcare analysts have been stunned by ABN AMRO’s acquisition of the Priory Group. Not just by the price but also the fact the deal was done by the bank’s capital markets division rather than its private equity arm. The Dutch-owned bank beat off competition from private equity players including Apax, Cinven and Charterhouse to acquire the chain of rehabilitation centres and health clinics.
News highlights
Williams leaves Sand Aire to join Graphite Capital
Summit tries out hedge funds
NIB Capital sold to JC Flowers
BHF Private Equity name change
Manufacturing sector loses confidence
Private equity loses out to debt
Gjensidige acquires Argentum portfolio
2005 Global Private Equity Barometer
Hardt increases PE activity
Turnaround vehicle launched
Mezzanine: demand remains high
Duchess I gets extension
GSC Partners launches hedge fund business
Seed through early stage
Pre-IPO PE funding on increase
SIPPs to welcome PE
ready2invest expands
Omlidon Technologies wins
Calling wireless tech entrepreneurs!
Swansea Unit gets £50m life science institute
Fund news
Lead story
German venture: not all bad
There seems to be some light at the end of the tunnel when it comes to European venture. Munich-based Wellington Partners has reached a final close on Wellington Partners III Technology Fund at €150m, exceeding its original target of €120m. The team undertook six months of pre-marketing for the fund and officially started fund raising in summer 2004 with a first close in December 2004.
Quick view
Palamon out fund raising
Impax raises €60m for renewable fund
Allianz holds initial close on new FoF
European Capital raises €700m.
Warburg closes fund on €6.5bn
CVC raises €6bn
Summit Partners raises US$3.3bn
First close for Candover
Montagu closes third fund
Electra closes €1.25bn fund
Lion Capital closes fund on US$1bn
MezzVest closes second fund
Weinberg Capital fund closing
Axcel holds first close
Wellington Partners closes €150m venture fund
Abingworth raises quoted stocks fund
Ciclad closes fourth fund
SVG raises third public equity fund
LTF targets start-ups
BCP closes on €320m
Euroventures closes fund
Second close for NeoMed life science fund
Exit news
Lead story
Graphite gets out of young women’s clothing
The £117.4m sale of Jane Norman to Baugur and Kaupthing made Graphite Capital a 2.9x return on its January 2003 investment when it backed a £70m buyout led by chief executive Saj Shah. At that time, the UK women’s fashion retailer had 46 high street outlets comprising 21 concessions, mainly in Debenhams, and 25 stand-alone stores across the UK. Now it has 39 stand-alone stores and 56 concessions, and annual sales have grown over the past five years by 230% and operating profits by 250%.
Arexis sold to Biovitrum
Candover sells Swissport for CHF1bn
DH exits Knowles
IPO quick view
Biotech IPO raises €77m
Stem-cell company floats on AIM
Doughty Hanson celebrates Saft IPO
Opoczno IPOs on Warsaw exchange
Esmertec IPO postponed
Wellington floats net mobile
Doughty celebrates RHM IPO
MTI floats ScreenTech
Secondary quick view
Rutland makes 2.5x return on Interfloor sale
3i exits EAT
Electra sells Bezier to MidOcean
Bridgepoint & Permira sell fitness clubs to Spanish VCs
CVC to sell Kwik-Fit
3i sells Zenith to Dunedin
VCs sells Searchspace to Warburg Pincus
Barclays PE sells Bénédicta to ABN
PPM Capital sells Barracuda to Charterhouse
CapMan sells Aurajoki to Primaca
Bencis sells Roompot to ABN AMRO Capital
Alpinvest sells IMCD to ABN AMRO Capital
Duke Street sells Galaxie to Europco
Cinven sells NCP to 3i
Advent Int’l sells Moeller to Doughty Hanson
Barclays PE sells Fosbel to American Capital
Carlyle & Eurazeo sell Terreal to LBO France
Buyouts
Food deal value doubles
P2Ps drive UK buyout market
Tough times for the mid-market?
UK buyouts boom in Q2
PE % of UK M&A in 2005 drops
Dataroom
German investment slows
Returns up by almost a quarter in 2004
Ireland: technology rules
Israeli high tech investments up
Q2 US PE fund raising
Q2 US Venture-backed IPOs
Q2 US VC investing figs revealed
2004: a good year
Euro tech investment up
Legal & Regulatory
Utilities regulation & PE boom?
Recent legislative developments in the field of utilities procurement have opened up the possibility of the awarding of long-term outsourcing contracts by utilities to affiliated undertakings without competitive tendering. Some private equity professionals think this will boost investment in the utilities sector across Europe. Anthony O’Connor reports.
People
New BVCA head
Beer & Partners appts
DN Capital adds
3i gets old Terra Firma hand
GE Commercial appts
New member for Rutland
TTP Ventures promotes
Permira hires adviser
3i builds Asian team
Halliwells AIM Lawyer of the Year
Growth Company awards
New IR head at Siparex
CVC promotes 2 to MP
Norton Rose strengthens Frankfurt
New 5 for Advent
E&Y entrepreneur award
Archangel new CEO
EI appts
AIFI launches 2005 award
Palamon appts
Phoenix appoints
New German head for EQT
Promotion at Debevoise
Prelude appts to board
SCM appts analyst
Mezz Management promotes
New board member for SYIF
New head for IVCA
Doughty principal appt
Promotions at Hannes
New faces at Alvarez
Halder moves
New VP for Summit
Abingworth appts partner
Quester VCT board changes
Lawyer award for Mourant
Investec nabs UBS veteran
BCV adds to Board
Lehman adds to real estate team
YFM appts
ISIS strengthens London team
SVG hires Bird
New BancBoston VP
BHF is Steadfast
Close Bros promotes
LDC appts
Marsh appts new PE head
Brown Rudnick adds
CIBC appts
Grant Thornton appnts
Headway hires Toon
Landmark founder dies
LGV appts
New face at Chequers
Probitas moves SF office
FEATURES
Retail: all shopped out?
The retail sector is in the grip of a slump in consumer spending. After years of high prices and mega deals, private equity funds are having to re-adjust to the new climate. Tom Allchorne hits the high street to find out what’s going on.
Fund-of-funds: working to stand out from the crowd
The fund-of-funds market continues to grow and with more money than ever being deployed into private equity funds, the need for new, and even existing, fund-of-funds offerings to differentiate is becoming more important than ever. Angela Sormani reports.
Public affairs work at EVCA
Javier Echarri of the European Private Equity & Venture Capital Association (EVCA) gives an update on the association’s public affairs work and looks at the ways EVCA has been dealing with the challenge of making sure that the industry isn’t misread or misunderstood by policymakers.
The Italian dream
Giuseppe Campanella, CEO of State Street Global Investments and responsible for the Italian fund-of-funds Fondamenta, talks to EVCJ about investing in the Italian market.
Should LPs worry about negative headlines?
Well the answer is obviously yes if investors in private equity funds (LPs) are going to find themselves reading about negative private equity returns. But as the impact of private equity on European economies (said to be backing investee companies that are employing close to one-third of the UK’s workforce, for example) grows and consequently their coverage in the mainstream press grows, is the reporting going to be more fluff than substance, and as such of much less concern?
These stories and more can be accessed by subscription with a username and password to www.evcj.com or by subscribing to the magazine version of European Venture Capital (& Private Equity) Journal.