March 2006 issue

News analysis

Editor’s Note

UK Chancellor of the Exchequer, Gordon Brown, will make his ninth Budget speech on March 22, amid hopes from the UK private equity industry that it can influence the UK Treasury to maintain an environment in which the UK continues to be one of the most competitive for UK private equity firms, in relation to its continental European counterparts.

Rich pickings for secondaries

While private equity fund raising hit record highs in 2005 and looks set to do the same in 2006 with around 680 new funds on the road looking to raise some US$217bn, secondaries players are preparing themselves for lucrative years ahead with certain players claiming that as much as 25% of their deal flow has come from players exiting the private equity market. The figure seems unusually high particularly given that allocations to private equity funds show no sign of abating. Angela Sormani reports.

VNU: a high price to pay?

If the private equity consortium pursuing Dutch publisher VNU succeeds in winning over shareholders it is likely to have to pay a hefty price. Some analysts say the consortium may have to pay between €30 and €31 a share, which equates to a price-earning ratio of 19 to 20 times 2006 earnings, while others have calculated the price at around 13 times EBITDA.

Bridging the gap

Since 2002, the nine Regional Venture Capital Funds (RVCF) set up by the UK Government have raised a total of £250.5m, and invested in almost 200 companies. Established to support growing companies languishing in the equity gap, they were set up by the Department of Trade & Industry (DTI) in order meet the need for capital at the smaller end of the market in England. Tom Allchorne looks at the progress being made by Regional Venture Capital Funds, and the future of public-private funding.

Trade buyers turn to PE

Trade buyers, frustrated by competition rules, which block them from acquiring their direct competitors and who are determined to avoid them falling into competitive hands, are seeking private equity houses to take controlling stakes in those businesses, according to Simon Holmes, competition expert and partner at SJ Berwin. The concept for the private equity house however doesn’t look too appealing, in particular when it comes to working out an exit strategy for the company. Angela Sormani reports.

3i testing the waters?

Last month 3i invested US$20m in Quadriga Capital Russia Private Equity Fund II and in so doing becomes the largest single private investor in the fund. 3i is not typically in the business of making investments in funds in order to gain entry to a country or market, but this is the second such investment it has made, following as it does in the footsteps of the May 2005 investment of US$45m (out of a total fund raising target of US$310m) in CDH China Growth Capital Fund II, based in Beijing. Lisa Bushrod reports.

News highlights

Mowbray Capital pulls the plug

EC looks at fund regulation

GIMV to expand?

BP Marsh floats on AIM

Ex-minister launches Russian fund

Oostvogels opens in UK

Wealth Management attracts interest

UK pension funds increase alternative investments

Seed through early stage

UK activity up

Amadeus and Imperial join forces for new energy project

Fund news

Lead story

Russian popularity continues to grow

Over the last year, Russia has been attracting more and more private equity money, with a number of domestic funds being raised to compete alongside an increasingly hungry Western European appetite. Tom Allchorne looks at the appeal.

Quick view


CGS launches second fund

Finance Wales launches environmental fund

SGAM raises €80m for Eastern Europe

IBIS targets media funding gap

Chrysalis targets the arts

Sitka tops up

Winch Capital closes

Exit news

Lead story

Nationwide Autocentres reaps rewards

Its current management and NBGI Private Equity in a £49m secondary buyout transaction have sold nationwide Autocentres, a UK-based MOT and car servicing specialist. The acquirer is Phoenix Equity Partners who beat off strong competition to acquire the business. The deal makes a return of 10x money and an IRR of 72% per annum over five years.

Quick view


Bridgepoint sells Robinia

CESA sold for €1.37bn

Gresham exits Altair

Apax puts Histoire d’Or on market

Marazzi to float

EQT sells Findus to CapVest

3i exits Witwood Food Products

AlpInvest spin-off makes exit

Primary sells Pegasus

Qsil in secondary buyout

ISIS doubles money on Language Line sale

Cegelec in US$1.3bn secondary buyout

Vision Capital sells Deloro Stellite

Konrad Hornschuch sold in secondary buyout

Indigo sells Aster-Cephac

CVC cuts IG interest to 10%

Carlyle makes 4x return on QinetiQ IPO

3i makes 3.4x return on Williams Lea deal

Optos lists on LSE

3i sells TG+ stake


Record year for European tech M&A

Mega deals boost technology

Pitango and Star top Israeli funds

Mezzanine: 1st €1bn facility on cards in 2006?


Quick view

Weil Gotshal poach

Abingworth appts

E&Y expands

Deloitte hires

Quartilium recruits

Impax adds

Candover recruits

Oostvogels opens in London

Interregnum hires

Aon promotes

Dawson to Impetus

Permira reshuffle

Paul Capital appts

Mourant in Guernsey

CVC appts

TowerBrook adds

AXA hires

Kennet recruits

TowerBrook appts

PwC promotes

New Advent office

Intermediate adds


Nordic Lights are shining

The Nordic area last year reported record-breaking deal activity and a strong fundraising environment, as well as a gradually recovering venture capital industry. But with prices for buyout assets increasing dramatically, can the buoyancy continue? Patrick McCurry reports

Belgium & Luxembourg: family ties

Nearly everyone who talks about the private equity market in Belgium refers at some point to the fact that the country’s corporate culture is dominated by family-owned business, many of which were set up in the late 1940s and 1950s. The reason they talk about these family businesses is because some three or four generations of family ownership down the line, many of them are facing some tough decisions about how to address the future of their companies. The buyout market is primed; waiting for what investors in Belgium think will be good pickings over the next couple of years. Anthony O’Connor reports.

LP Talking Head

Taking a view: Swiss Re

Swiss Re Private Equity Holding started investing in private equity in 1995 in both buyouts and venture. The team is led by Harold Weiss and is composed of 15 individuals operating out of Zurich and New York. The team invests both proprietary as well as third-party capital and has commitments in over 120 partnerships worldwide.

Legal & Regulatory

Enterprise Capital Funds are coming!

This month the UK Government is expected to announce the winners of the fund management mandates for the first, or commonly referred to Pathfinder, Enterprise Capital Funds. The process is being managed by the UK Department of Trade & Industry’s (DTI) Small Business Service unit, which is in turn being advised by leading private equity fund formation law firm SJ Berwin. Lisa Bushrod reports.

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