What private equity firm is the fairest of them all?
That’s the ambitious question recently broached by Oliver Gottschalg, an associate professor of strategy and business policy at the HEC School of Management in Paris. Not the firm that has raised the most money or garnered the most headlines, but the one that has provided the best returns to limited partners over a 15-year period (which is, ultimately, how such firms are judged).
Gottschalg, in partnership with Dow Jones’ Private Equity News, looked at PE firm performance between 1996 and 2005 (anything since then, he correctly argued, is too young to be accurately assessed). To qualify, a firm had to have raised at least two funds during the period, with at least $500 million in committed capital (the multiple fund requirement was to guard against one-hit wonders). The firm also could not have raised a fund during that period for w! hich performance data was unavailable.
Gottschalg’s universe ultimately included 63 firms that raised around $232 billion for 182 funds. Not a complete accounting — and we unfortunately don’t get the full list, so as to learn what firms were excluded — but a decent sampling.
What he found was that U.S.-based megafirms like Blackstone and KKR didn’t make the cut. Instead, the Top 10 was peppered with U.S.-based “large-market” firms and European megafirms.
The top dog (by a wide margin) was Los Angeles-based Leonard Green & Partners, which raised a $1.24 billion fund in 1999 and a $1.85 billion fund in 2003 (it later supersized with a $5.3 billion fund in 2006, but those results are not included). It was followed by a quartet of European firms: Nordic Capital, Astorg Partners, Charterhouse Capital Partners and Gilde Buy Out Partners.
The back five are: Linsalata Capital Partners, Berkshire Partners, CVC Capital Partners, AXA Private Equity and ! Brockway Moran & Partners.
I’ve posted the full study here for your perusal.
*** The peHUB Persons of the Year will be posted Monday, so keep sending in submissions. Remember, these are people who had a major influence on VC/LBO happenings in 2009, not necessarily a positive or negative influence.
*** Have a great weekend!
Regado Biosciences Inc., a Basking Ridge, N.J.-based developer of antithrombotic therapeutic aptamers with active control agents, has raised $40 million in Series D funding. Edmond de Rothschild Investment Partners led the round, and was joined by return backers Domain Associates, Quaker Bioventures, Aurora Funds and Caxton Advantage Life Sciences Fund. The company has now raised around $83 million since its 2002 inception.
Linsalata Capital Partners has acquired Spartan Foods of America Inc., a Spartanburg, S.C.-based maker of pizza and pancake products under the Mama Mary’s brand. No financial terms were disclosed, except that Golub Capital provided a $20.5 million senior debt facility and $500,000 equity co-investment. !
MGM will receive first-round acquisition bids later than expected, due to protracted negotiations over non-disclosure agreements. Specifically, MGM wanted to restrict prospective buyers from speaking directly with MGM’s creditors. The debt-laden studio is currently owned by Providence Equity Partners, TPG Capital, Sony Corp. and Comcast.
Inertia Beverage Group, a Napa, Calif.-based provider of direct sales technology and services to the wine industry, has raised $14 million in new funding. PEI Funds was joined by return backers Allegis Capital and Sid R. Bass Associates. The company previously raised over $16 million, and this past summer acquired wine fulfillment company New Vine.
Plurality Ltd., an Israeli maker of chips for manycore processing, has raised $12 million in second-round funding from undisclosed Japanese investors. The company previously raised $8 million.
Field View Solutions, an Edison, N.J.-based provider of enterprise software for data center managers, has raised $2.75 million in Series A funding. SJF Ventures led the round, and was joined by Milestone Venture Partners and ! Osage Partners.
MotorExchange, a New Delhi-based online used vehicle exchange for the Indian market, has raised an undisclosed amount of Series A funding from Canaan Partners.
Adimab Inc., a Lebanon, N.H.-based developer of a human antibody discovery platform in yeast, announced new research collaborations with Pfizer and an undisclosed second company. It also announced the receipt of milestone payments from two prior discovery collaborations with Merck and Roche. No financial details were disclosed. Adimab has raised around $21.5 million in VC funding from Google Ventures, OrbiMed Advisors, Borealis Ventures, P! olaris Venture Partners and SV Life Sciences.
Fletcher Asset Management has agreed to acquire Budget Travel from Newsweek Inc., a unit of The Washington Post Co. (NYSE: WPO). No financial terms were disclosed.
Key Bridge Partners has acquired U.S. Para Plate Car Wash from a unit of CIRCOR International (NYSE: CIR). No financial terms were disclosed. U.S. Para Plate makes components used in commercial car wash systems.
NTK Holdings Inc. (Nortek), a Providence, R.I.-based maker of ventilation, air conditioning and heating products, has completed its financial restructuring and emerged from Chapter 11 bankruptcy. The restructuring eliminated around $1.3 billion in debt, and includes a new $250 million asset-based credit facility for working capital. Pri! or to its bankruptcy, Nortek had been owned by THL Partners.
Jones Stephens Corp., a Moody, Ala.-based plumbing supplies company backed by Cortec Group, has filed for Chapter 11 bankruptcy protection.
Amadeus IT Group has reached an agreement with lenders to amend the travel reservations company’s loans, in order to pave the way for an IPO. Company backers include BC Partners, Cincen, Air France, Iberia and Lufthansa.
Crimson Exploration Inc., a Houston, Texas-based natural gas and crude oil company backed by Oaktree Capital Management, raised around $100 million in its Nasdaq flotation. The company sold 20 million shares at $5 per share, compared to a plan to sell 18 million shares at between $6 and $8 per share. Barclays Capital and Credit Suisse served as co-lead underwriters. Crimson closed its first day of trading down 17.12% at $4.31 per share.
Kraton Performance Polymers, a Houston-based maker of polymers used in products such as disposable baby diapers and razor blades, closed its first day of post-IPO trading up 0.1% at $13.51 per share. Shareholders include TPG Capital and JPMorgan Partners.
International Meal Co., a Brazilian restaurant chain controlled by Advent International, reportedly has indefinitely delayed its IPO due to weak demand.
TDC, a Danish telecom group that plans to merge with PE-backed majority owned Nordic Telephone Co., said it will pay an interim dividend of approximately $1.16 billion. It gave no reason for the payout. NTC is owned by Apax Partners, Blackstone Group, KKR, Permira and Providence Equity Partners.
Google is in talks to acquire Yelp for at least $500 million, according to TechCrunch. Yelp is a San Francisco-based local business directly and review site, which has raised around $33 million in VC funding from Bessemer Venture Partners, Benchmark Capital and DAG Ventures.
Firms & Funds
Elysian Capital, a UK mid-market private equity firm, has held a £70 million first close for its debut fund, according to LBO Wire. The fund target is £200 million, with a final close expected next summer.
Graham Partners is raising a $50 million annex to its $273 million debut fund, which was raised in 2000.
Levine Leichtman Capital Partners of Los Angeles has held a $1.1 billion final close on its fourth fund, according to LBO Wire. Limited partners include the Arizona State Retirement System, CalPERS, the State of Connecticut and the Florida State Board of Administration. www.llcp.com
Parish Capital has held first closes on two new funds-of-funds: Parish Capital III, a North American fund with a $450 million target; and Parish Europe II, a Europe-focused fund with a €250 million target. The firm also promoted Bernard De Backer to partner, Tracy Harris to managing director and Scott Penwell to director.
SVB Financial Group (Nasdaq: SIVB), the parent company of Silicon Valley Bank, said that it has received U.S. Treasury Department approval to repay $235 million in TARP funds (plus accrued but unpaid dividends).