February 2005 issue

EVCJ awards for work undertaken in 2004

News analysis

QIPOs find favour with private equity

The ingenuity of lending banks is being put to the test by private equity firms these days. Firms looking to IPO their investments at a future date are forcing bankers to come up with ever more creative debt structures to help maximise transaction potential. Hence the birth of the Qualifying IPO concept or QIPO, which aims to keep borrowing costs down to a minimum and smooth the financing path of a company post-IPO. Carol Dean reports

When is big too big?

The news about the possible €11bn buyout of Grupo Auna broke at the end of last year. The acquisition of Spain’s second largest telecoms company by Blackstone, Apax, CVC, Providence Equity Partners and Carlyle would be the largest buyout in Europe, almost double that of the current title holder, that of Seat Pagine Gialle, which was bought in 2003 for €5.65bn by BC Partners, CVC Capital Partners, Investitori Associati and Permira. Tom Allchorne takes a look at the attractions of the mega deal and asks when big is too big?

European high yield outlook

The European new issue high yield bond market broke previous records in 2004, with the total topping the €20bn mark for the first time in its 12-year history. And a sustained healthy flow of issuance is likely to continue through this year as sponsors examine the possibilities of realising gains facilitated by the fixed income markets. Anthony O’Connor reports

News highlights

Private equity news

2005: the future is bright

HarbourVest backs Nova Capital in tech acquisition

PE back office steals the limelight

NMB-Heller restructures

HSBC targets Asia

MBO at Invest Equity

CalPERS reduces PE allocation by 1%

Debevoise & Plimpton publishes European private equity handbook

Triago launches Triago-X

Debt causes problems for SMEs

Final draft of European valuation guidelines published

CalPERS reaches settlement in disclosure case

Fund sizes to increase says SCM report

Sovereign Capital changes structure

Venture capital news

UK Government borrowing too high says BVCA survey

JVP most active Israeli VC

Biotech outperforms pharma

Protection needed for private investors

Government reviews tax treatment of spin-outs for academics

SBIC to boost French venture

VCT mergers take off

Fund news

Advantage Capital launches second fund

NeoMed closes fourth life sciences fund

Quester reopens VCT 5

First close for Wellington VC fund

Advent Venture closes fourth fund

Second close for CapMan Mezzanine IV fund

Standard Life FoF reaches first close

Iberian fund reaches second close

Nokia forms new fund

AXA closes secondary fund on €750m

Exit news

Granville Baird sells Nobis

Gilde sells Plastal to Nordic Capital

Cinven’s Fitness First sells Gymbox

LDC makes more than 100% return on Adfil sale

LDC sells Bushboard

AMJPE and 3i sell stake in Zero Waste

Apax and Duke Street sell Wickes

Segulah sells CCS

CBPE sells Park Resorts to ABN Amro Capital

Palamon Capital Partners sells TeamSystem

Gresham exits Beck & Pollitzer

Q4 strong for European IPOs

Spirit sells 364 pubs to Tchenguiz

Granville floats ArmorGroup

Doughty Hanson makes 5.5x return on shopping centre sale

CVC cuts Halfords stake

Apax sells Groupe Hubert for €105m

HgCapital makes 4x gain on Raymarine

Inion achieves IPO

AIM float for MicroEmissive Displays

LDC sells stake in Morley Electric

AXA makes 40% IRR on Champeau-Gau sale

ISIS floats Staffline

VPSA sells French tech company

GIMV sells Gealan to AXA Private Equity

AXA reduces stake in Bull

Duke Street and Segula exit EEN

Danske Bank sells non-Nordic portfolio

LDC sells KIG

Gresham exits Penn Pharmaceuticals

Industri Kapital exits MacGREGOR

Graphite Capital backs Aktrion

Dunedin floats Goals

Barclays makes 2x return on GLS exit

Doughty Hanson sells Swedish shopping centre

West Private Equity sells schools

EAC makes French realisation


Euro LBO volumes reach record levels

Retail M&A flourishes in 2004

Q4 investment accelerates

UK buyout market reaches record levels

Are you being fairly compensated?

GPs predict bigger and more mid-market deals

Asia: Growth spurt

New record for Spanish investment

US venture puts in strong performance


New Sovereign structure

Cinven move

Moves at 3i

Phoenix hires

DLA and Piper Rudnick merge

M&S chiefs reunite

Long to GMT

CapMan reshuffle

Amadeus promotes six

Perricone succeeds Sala

SVG appointments

Boyle departs

Exponent expands

CIBC hires lev fin director

Probitas appts

SJ Berwin appts

Benchmark appts

Sagitta name change

Francisco chooses Schumacher

Carlyle promotes

New MD at KKR

New Adveq select execs

EIF boosts team

Waterland boosts board

Caylon appts

Quester team boost

Strelow to Mayer Brown

Beringea hires



Wind leads way in Europe’s growing energy investment

When it comes to private equity investment in energy, Europe tends to lag behind the US. But in one area, renewable energy, it is the Europeans that appear to be taking the lead. Patrick McCurry reports.

Fortress Asia

While Asia is increasingly being viewed as a hotbed of investment opportunities for a growing number of private equity houses, the potential in backing even just the top tier of fast growing companies in China and India is theoretically phenomenal. Two similar countries in some ways, but worlds apart in others. Anthony O’Connor reports.

Asset-based finance: no longer the poor relation

Asset-based finance has moved on apace since its arrival in the UK eight years ago, with increasing sophistication, bigger ticket deals, an emerging syndications market and expansion into mainland Europe. Joanna Gant reports.

Buyouts: Wheat from the chafe

Debt multiples in Europe’s larger leveraged buyout market are rocketing, while sponsors’ equity levels are plummeting. Yet although bankers predict that a rash of defaults will occur over the next few years as firms struggle under vast burdens of debt, some argue that many companies and sectors can support even today’s aggressive structures. Joanna Hickey reports.

LP Corner: The fund raising race begins

Whichever way you look at it, 2005 is going to be a bumper year for private equity fundraising. Buyout and venture capital firms, many of which raised their last funds in the boom years of the late 1990s and 2000, are running out of cash to invest (unless they are one of the few that have managed to raise money in the last two years) and will be busily booking their plane tickets in bulk as they set out to market their latest offerings to potential limited partners. Vicky Meek reports.

Legal & Regulatory: Inducement fees

The use of inducement, or break, fees in UK public-to-private transactions are now commonplace in the UK, and are spreading to continental Europe. Tom Allchorne looks at how different countries use such fees and reports on the latest developments.

End of Year Review

European leveraged finance: Market institutionalization

European leveraged finance has undergone a seismic change in 2004. Spiralling debt multiples amid unprecedented liquidity and the increasing institutionalisation of the leveraged loan market have been major themes. The entry of US hedge funds and other new investors has imported pricing volatility into the previously stable mezzanine and senior debt markets and driven major structural innovations. Joanna Hickey reports.

Lobbying at the EVCA

Javier Echarri of the European Private & Venture Capital Association (EVCA) explains some of the policy and regulatory issues that the EVCA has been dealing with during 2004 and will be addressing in the coming months.

The BVCA’s public affairs role

John Mackie, chief executive of the British Venture Capital Association (BVCA) gives an overview of the BVCA’s activity over the year and defines the Association’s role in the private equity community.

Fund of Funds: Challenges or opportunities?

In the December 2003 article Funds of Funds are Here To Stay in the European Venture Capital Journal, Jesse Reyes, managing director, Reyes Analytics outlined the history of the explosive growth of the private equity fund-of-funds vehicle. That article discussed the basic reasons why fund-of-funds are so prevalent and the reasons that investors would choose the fund-of-funds vehicle over direct investment in funds. Here Reyes takes a look at further developments in the fund-of-funds space over the last year, updating some of the observations in the last article given the current fund raising and performance environment and discussing some of the ongoing and new challenges.

Secondaries: more to come?

While many say the secondaries market has become saturated, with an increasing diversity among players, the growth of the secondaries market is predicted to continue in 2005. A number of secondaries managers raised funds during 2004 including AXA Private Equity, Greenpark Capital, Pantheon and Partners Group and a larger number are expected to be completing their fund raising or entering the market over the next 12 months. The secondaries landscape is expanding with players demonstrating a wide range of experience and tools required to handle the full spectrum of secondaries transactions, from single limited partnership interests, through to portfolios of multi-jurisdictional fund positions and portfolios of direct investments. Angela Sormani takes a look at the landmark deals of 2004 and examines the opportunities available for the funds operating in this highly competitive market.

Still a long way to go

With a year of fund raising ahead, 2004 was always going to be known as the year of the exit, and even European venture capital wasn’t immune from the charge. The year saw trade buyers return to the fold in greater numbers, accompanied by a stock market that was willing to take venture-backed companies. Tom Allchorne looks back at the year, finding that despite some impressive returns, European venture still has a steep hill to climb.

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