As we enter 2008 the horizon is as uncertain as it was before Christmas, but one thing is for certain – it will be a tougher year for private equity.
As January got under way, the €44.2bn
Also, it is clear that the barrage of criticism against the industry that started early last year is set to continue with a vengeance, with the unions preparing for a year of campaigning and private equity high on their agenda. Guy Hands’ announcement earlier this week that Terra Firma is to cut up to 2,000 jobs at EMI will not help.
However, the picture is not all gloomy and as the year gets under way the stalwart of the last quarter – the mid-markets – continues to be buoyant. Not only is deal flow remaining healthy, with a number of meaty deals (see mid-market news pp 6–8), but recruitment is also rife – most interestingly, with some jumping ship from the large buyout space to the mid-markets.
In December, lower mid-market fund
Last week saw Bruce McLaren, a managing director at Royal Bank of Scotland working on debt financing for larger buyouts, appointed chief investment office at Noble fund managers in Edinburgh. The move comes after 14 years with RBS. And Peter Brooks returned to Lloyds Development Capital from Pi Capital last October.
General recruitment has also continued to be busy (see people news pp 9–10). The drivers, of course, are record fund raisings over the last 12–18 months, which have fuelled European expansion underpinned by a continuing supply of debt for these types of deals.
A quick glance over the last couple of months confirms this, with Stockholm-based
In December, Palamon made two appointments, with Anthony Gardner (previously executive director, European leveraged finance, Bank of America) joining as director of structured finance and Alexis de Dietrich, (previously with Merrill Lynch in London) joining as vice-president.
December also saw Industri Kapital – a great example of how increased fund raising has accelerated recruitment – announce the appointment of Dan Soudry and Helena Stjernholm as partners in France and Sweden. At the same time, the firm promoted five team members to deputy director.
Following its fund raising, Mid Europa Partners also made three promotions. Robert Knorr, Matthew Strassberg and Zbigniew Rekusz have been promoted to partners in its London and Warsaw offices.
While the promotions are an obvious natural progression, there is a suggestion that in some cases they may also help ward off Western private equity firms moving into the area. For example, Bridgepoint hired Advent International’s Warsaw head Khai Tan when it launched Polish operations earlier this year, and Carlyle recently expanded its CEE team with three hires, including Enterprise Investors’ Ryszard Wojkowski.
The mid-markets have also seen transatlantic movement, with US firm
The firm has so far recruited nearly 30 professionals, including London managing directors Matthias Allgaier (previously with Apax Partners and General Atlantic Partners) and Paul Canning (previously with Gresham Private Equity).
So it seems that as the new year dawns, so the ever-changing face of private equity will continue to evolve and adapt to new circumstances.