August Issue 2005

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


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


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.


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


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?

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