Private equity shops are shedding personnel in an attempt to cut costs in a market marked by fewer investment opportunities and the prospect of shrinking funds.
“In response to extraordinary market conditions, Carlyle has taken measured steps to balance its cost structure with the current investment climate,” says Carlyle spokesman Chris Ullman. “The firm is well positioned to take good care of our investment portfolio and has the resources to create and respond to compelling investment opportunities.”
The cuts come with office closures, and Silicon Valley is particularly hard hit.
Carlyle is shuttering its office in Menlo Park, Calif., which was opened in January to troll the local region for tech buyouts and growth equity investments. Among the jobless are Managing Directors Nick Sturiale, formerly with
Worldwide, Carlyle also closed its Warsaw office and cut its Asia leveraged finance team. The cuts comes as the firm recently held an interim close of about $14 billion on Carlyle Partners V (See story, page 6).
About half of the 3i Group’s layoffs will be in its U.K. office, but the firm said last month that it would close its Menlo Park, Calif.-based office by the end of the year. The move has been planned for some time as 3i has been moving out of venture capital.
American Capital said it would close two offices, one of which will be its locale in Palo Alto, Calif., which housed the firm’s technology practice.
The publicly traded firm is not identifying which offices are being shut, but likely candidates for the second closure include Boston and Chicago. American Capital made similar moves earlier this year, closing both its Philadelphia and San Francisco offices.
One industry source says that the Chicago office recently saw some of its most productive deal-makers leave, which makes it a likely target for closing or at least downsizing. Calls to five different investment professionals at the Chicago office were not returned.
New York-based buyout shop
Behrman raised $1.2 billion for its third fund in 2001, but has been struggling to get anywhere near that level for fund IV, which has so far raised about $137 million, according to Thomson Reuters (publisher of PE Week).
There are, of course, investors losing their jobs. But the majority of the affected employees work in the back-office roles, such as marketing and human resources.
To be sure, not every buyout firm is going through layoffs. Distressed asset firms are thriving in the economic downturn.
A spokesman for
The spokesman declined to say if all empty positions would be refilled, but did say that Apax plans to hire three senior associates in New York and either three or four senior associates in Europe.
Apax raised more than $15 billion for its seventh European buyout fund, which closed last year.