November 2005 Issue

News analysis

Out with the new, in with the old

As this year draws towards its close, it’s easy to assume that one of the things 2005 will be remembered for is the vast amount of money pouring into private equity funds. But, for the most part, unless you are an existing and established buyout fund, little or none of this fund allocation bonanza will have passed your way. Europe’s venture capital funds didn’t get much of a look in; but then the majority of them didn’t make their investors either enough or any money and so shouldn’t expect to be funded a second time around. But the very fact that so many new funds, especially those European venture capital funds spawned in the 1999 to 2001 bubble, didn’t deliver value has added to the perception of risk associated with anything new, perhaps helping to explain part of the current appeal of tried and tested European buyout groups to institutional investors. Lisa Bushrod reports.

Feeling the pressure

The fears over early cash withdrawals continue this month with Standard & Poor’s (S&P) latest research note, PIK Pressure: How Pay-In-Kind Bonds Have Affected European Corporate Credit Ratings. In 2004 and the opening half of 2005, says S&P, owners of European companies that have been the subject of an LBO have been using PIKs to reduce their capital commitment by paying themselves dividends, placing a financial burden on companies that has affected their credit ratings. Tom Allchorne reports.

Public v private equity

Private equity and public equity have always interacted to some degree but many believe the boundaries between the two are becoming blurred. If true, what are the implications for the private equity industry?

SPAC to the future

SPACs are coming to the UK and they are aiming to take on private equity. They’ve been around in the US since the 1990s, but over the last year SPACs, or specified purpose acquisition companies, have become really popular Stateside and now they are set to take off in Europe. A SPAC is an asset-free company that lists on the public market with the intention of using the money raised in the IPO to invest in or acquire companies operating in a specified industry. Tom Allchorne reports.

In the club

Club buyout deals are becoming increasingly common, as private equity houses band together to purchase larger companies. But these deals do not always go smoothly and there are some concerns about what happens when houses fail to agree on strategy or exit timing and about the impact on LPs’ investment diversification.

WRAP solution for private equity deals

A new type of insurance product for private equity professionals is making its market debut this month. Aon Limited, the UK arm of the insurance broking and risk consulting firm, has unveiled the new product called a Warranty Replacement and Acquisition Protection (WRAP), to replace the usual giving of warranties by a seller to a buyer in an M&A transaction. The product is said to offer an alternative for deals deadlocked over warranty issues. Angela Sormani looks at the costs and appeal of such a product to the private equity community.

Understanding private investors

Private equity has a reputation as an exclusive club for institutional investors and uber high net worth individuals among the private investment community. But there are ways for those private investors without millions in the bank to get access to the top-performing, big brand names. And the benefits of having such investors on board can work both ways. Angela Sormani reports.

News highlights

UK LPs to increase PE investment

UK Gov’t launches director disqualification website

LSE goes European

Darby targets CEE

Partners acquires West LB portfolio

Two-thirds of deals scrapped because of pensions

BoS (Ireland) targets acquisition finance

Kaupthing builds PE portfolio

European Capital opens London office

PE firms wary of debt levels

PE rules M&A market

Pension deficits deter PE

AlpInvest spins out Taros Capital

Tech venture investment still slow

Seed through early stage

Small venture deals increase

Marketing to private investors: problems ahead?

Fund news

French tech FoFs launched

A French technology fund-of-funds has been launched with €150m for investment. The Fonds de Fonds Technologique (FFT) was unveiled by Thierry Breton, Minister for the Economy, Finance and Industry; Francis Mayer, chief executive of Caisse des Dépôts; and Philippe de Fontaine Vive, vice-president of the European Investment Bank, at the headquarters of Caisse des Dépôts in Paris this month.

Quick view

Nestle launches €500m fund

European Capital closes on €750m

Carlyle raises €760m for real estate

Spanish SME fund

Macquarie raises US$1.3bn for real estate

TVM closes life science fund

SPEFOFIII first close

Creative Capital Fund launch

KKR European Fund II closes on €4.5bn

First close for Mangrove tech fund

Exit news

Made in Europe, big in America

The IPO of Vistaprint might initially look like an exit for US venture capital, but in fact, the company started life in Paris. Tom Allchorne looks at how a small business card company came to make it big in America.

Exits: quick view

Cinven sells Fitness First to BC Partners

Q-Cells to float

HJB exit for VCTs

Sofinim exits Aviapartner

Reiten sells Heimstaden

Partial exit for Texas Pacific

Telenet preparing for IPO

HSBC regional fund sells WCBS

Bridgepoint sells Virgin Active

Backers make 4x from Cablecom sale

Permira sells Premiere shares

Beringea sells Nectar

CapMan exits PPTH-Norden

LGV exits Hayley Conference Centres3i celebrates Interhyp IPO

3i makes 5.3x on Petrofac float

Ventizz floats Ersol

Vistaprint floats on NASDAQ

Esmertec IPO

ABN AMRO in tertiary buyout

GIMV sells Telenet shares

3i exits RK Group

Earlybird cashes in on Tipp24

3i sells Republic to Change Capital

Pompe Gabbioneta sold to Weir

Platinum Equity sells ACR Logistics

Duke Street Capital sells Sporting Index

Industri Kapital exits Sydsvenska Kemi

CVC’s Adisseo acquired by Chinese giant

VCs set for biotech exit

Beringea to sell LFR stake

Montagu to let ferry company sail

Pricoa sells Hofmann

3i sells Encon

Permira sells Little Chef

Pizza group to float

BASF sells DENC stake

Innova partial exit

Orange Slovakia sold


French PE hitting new heights

Alternative investments on the up

Italian investment doubles

French venture funds stats

US venture on a high


SVG appts

Access recruits

Abingworth hires

Lovells’ resignations

DVC loses

Cinven appts

ISIS EP adds

3i infrastructure

HgCapital promotions

ISIS EP appts

GE promotes

NautaDutilh promotions

Close Bros recruits

CapMan appts

ITI LS resignation

Darby expansion

Index appts

Carlyle hires

Triangle partner

Oakwood poaches HBOS

Kleinwort adds

Quester promotes

Entrepreneur awards

GBCP promotes

Acanthus appts

Iris recruits

Electra adds

SWVF appts

New Kaupthing team

Euro Cap London

EVCA appts

Invision adds

New role for Reyes

TVM moves Pihlava

Risman leaves Apax

Promethean hires

ITI LS appts

AMJPE name change


Taking a view: Suva

Placement agents are dead?

Long live placement agents. With fund raising as buoyant as it’s ever been in private equity and a trend for firms to build in-house investor relations teams, how are these intermediaries adapting and evolving? asks Vicky Meek

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