Private Equity – Speculation as Annunziato quits Merrill

Edward Annunziato’s surprise defection from Merrill Lynch in March has prompted increased speculation over the bank’s plans to address the European private equity market. Annunziato quit to become chairman and chief executive of online investment bank Wit Capital Europe, a joint venture between Wit Capital Group of the US and Dublin-based Internet financial services group Enba.

Last autumn, Merrill Lynch revealed plans to launch a major European private equity operation, to be spearheaded by Annunziato, the co-head of investment banking for Europe, the Middle East and Africa. Observers had expected fund raising to kick off during the first quarter this year.

Annunziato’s departure will evidently have retarded progress on the fund raising front. A spokesman for Merrill Lynch comments only: “We are already very active in private equity and we have a number of initiatives to grow the business. We are very committed to proceeding aggressively in Europe”.

Sources close to the bank report that, well before Annunziato’s move, Merrill had been looking both internally and externally for a co-head for the European private equity operation. That search apparently is continuing, and informed observers have inferred that the eventual appointee will take over as head of the private equity group in Europe.

It is still unclear exactly where Mercury Private Equity, Merrill’s current foothold in the European private equity market, will fit with the projected pan-European operation. However, given the target market for the new Merrill fund, which with a projected target of euros 1 billion to Euro 2 billion ($970 million to $1.9 billion) will inevitably be focused on top end deals, Mercury Private Equity’s mid-market, primarily UK focus looks unlikely to give rise to internal conflicts of interest. A Merrill spokesman confirmed: “Any private equity funding programme that we develop would be complementary to our colleagues’ efforts at Mercury.”