Maitland Private Equity Monitor – 19 May 2017

19th May 2017

Worth a read


Former Apax boss urges buyout groups’ founders to step back

Alan Patricof, who founded Apax Partners in 1977, has said that the founders of the largest US buyout groups should step down from the daily running of their businesses and give way to new talent. Patricof stepped down from daily management at Apax in 2001 at the age of 70. Financial Times, 17 May 2017

3i's Simon Borrows knows when to seek a piece of the Action

The FT’s Lombard column features an article about the dealmaking exploits of Simon Borrows at 3i Group. This leads with the increased value of Benelux discounter Action, originally a £114m investment. The business is now valued at £1.7bn. Borrows’ new nickname at 3i is “Dr No”, a name born of his willingness to curb investment in glamorous assets, rather than to stroke a cat Bond-villain style. Financial Times, 18 May 2017

Private Equity's People Problem

Chris Cumming discusses the fact that private equity firms may be wasting time and causing disruption by shuffling chief executives at portfolio companies. This follows research by AlixPartners which found what it called a “disturbingly high rate” of CEO turnover. According to its survey, 58% are sacked in the first two years and 75% throughout the course of an investment. Private Equity News, 18 May 2017

LeapFrog targets private equity gains in Africa and Asia

FTfm profiles Jim Roth, one of the founders of LeapFrog Investments, a private equity firm specialising in emerging markets. Despite its launch during the midst of the global financial crisis, LeapFrog secured early support from high profile backers, like Bill Clinton and George Soros, helping them get other investors on board. It claims to be the world’s first billion-dollar private equity group dedicated to impact investing, which is aimed at generating social and environmental benefits as well as financial returns. To Roth, the current abundance of dry powder as an opportunity. “We’ve done small deals, and that works for us because we can build [those companies] up and sell them to the people with the dry powder”, he said.  Financial Times, 12 May 2017

Ex CalPERS board member asks for report on credit line use

The California Public Employees’ Retirement System failed to follow up on a request asking to analyse the use of subscription lines of credit by its general partners, according to comments made during the $320bn pension plan’s investment committee meeting on Monday. Michael Flaherman again raised the issue of fund-level leverage use by GPs. Private Equity International, 16 May 2017


Wall of money


Demand for private equity boosts Chequers fundraising

Chequers Capital, the French mid-market buyout group, has raised more than €1bn in less than three months in the latest sign of demand for private equity funds among investors faced with low returns elsewhere. The company said that it had drawn support from existing and new investors, which include pension funds, sovereign wealth investors and funds of funds. Financial Times, 18 May 2017

European fundraising reaches pre-crisis levels

Fundraising by European private equity firms has hit a nine-year high in 2016, driven by a 70% increase in buyout fundraising and in particular by demand for upper mid-market funds of up to €1bn . The association said buyout funds raised €56.3bn last year, compared with the €33.6bn raised in 2015. Private Equity International, 17 May 2017

SVP holds $1bn first close on Fund IV

Strategic Value Partners has held a first close on its fourth special situations fund on around half of its overall target, Private Equity International has learned.
Strategic Value Special Situations IV has raised a little over $1bn. The fund is targeting $1.75bn plus the extra $350m of reserved capacity for a fund-of-one, for a total of $2.1bn. Private Equity International, 16 May 2017

Oakley Hits €750m Hard Cap And Asks Investors If It Can Raise More

The mid-market private equity firm wants to see if it can raise €50m more hard cap for its latest flagship fund, and extend the fundraising period until September. Private Equity News, 18 May 2017

Former KKR Investor Sets Up New Investment Shop

Philip Wack, a former director at US buyout firm KKR & Co., has set up a new investment firm called Moonlake Capital. The London-based firm will target investments in established mid-market companies worth between €250m and €300m. Private Equity News, 15 May 2017

Epiris holds first close on new fund

The UK firm has amassed £500m for the vehicle, its first as an independent manager which launched in early 2017 with a target between £800m and £1bn, according to investor sources. Private Equity International, 18 May 2017

ACON closes Fund IV on hard-cap

ACON Investments beat its original $850m target to close on the hard-cap on its fourth mid-market fund after 19 months of fundraising. The Washington DC-headquartered private equity firm raised $1.07bn for ACON Equity Partners IV, according to a statement. The fund will target control positions mainly in the US mid-market. Private Equity International, 17 May 2016


Deal chart


Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
SafetykleenApax PartnersWarburg PincusUndisclosed18/05/2017UKIndustrials
IPH GroupAdvent InternationalPAI PartnersUndisclosed18/05/2017FranceManufacturing
Ciprés AssurancesApax FranceTA AssociatesUndisclosed18/05/2017FranceInsurance
Alpha CoporationJ-STARUndisclosedUndisclosed17/05/2017AsiaEducation
Bureau van DijkMoody’s CorporationEQT Partners€3bn16/05/2017EuropeBusiness intelligence
SchulerhilfeOakley CapitalDeutsche BeteiligungsUndisclosed16/05/2017EuropeEducation
EuropartAlpha Private Equity FundsTritonUndisclosed16/05/2017EuropeMotor industry
TechInsightsOakely CapitalEpiris£26m; total proceeds of £455m15/05/2017USIntellectual Property
Max HealthcareMax India & Life HealthcareInternational Finance Corporation$65.5m12/05/2017AsiaHealthcare

Movers and Shakers


Europe

Lazard’s European head of private capital advisory, Pablo De La Infiesta, has left after almost 11 years. It is understood there is at least one firm courting him for an advisory role. Link

Caterina Romanelli, the head of responsible investment at Paris-based PAI Partners is set to leave over the summer, with the firm currently in the process of hiring a new environment, social and governance manager. Link

London-based Bridgepoint has hired David Walsh, the Bank of Ireland’s former head of global acquisition finance, as it considers a move into private credit. Link

Silverfleet Capital has announced a number of new hires across its offices in London, Munich and Paris. Jan Kux and Guntram Kieferle join the Munich office from JP Morgan and Munich University of Applied Sciences respectively. Johan Boork joins the head office in London from Swedish pension fund AP6 and Constance d’Avout the Paris office from EQT. Link

Neuberger Berman has hired ex-Coller Capital investment professional Philipp Patschkowski, who started for NB Alternatives on Monday to help build its European private equity business. He worked for Coller for almost a decade before leaving in April. Link

Hamilton Lane, in recognition of a recent increase in its European client base, has made three hires in London. Carolin Blank and Ahmed Khalil join the relationship management team, while Lali Sichinava joins as a VP on the business development team. They join from Alvarez & Marsal, BlackRock and Neuberger Berman respectively.

Aliter Capital, the investment firm focused on small to mid-sized UK support services businesses, has expanded its team by making two new hires. Claudia Beveridge joins as legal counsel and Alexander Noel as an investment associate. Link

North America

The Orange County Employees Retirement System (OCERS) has named Molly Murphy as chief investment officer. Murphy begins her position on 23 June and she replaces Girard Miller who stepped down from the role in December. Link

Asia

CVC Capital Partners has appointed Sigit Prasetya, a managing partner at the firm, to lead the firm’s operations in Asia. He replaces Roy Kuan who will be retiring from his post as managing partner for the region in about 18 months after working for the firm since 1999. Link

 


From the horse’s mouth...

“It really was a case of Adam Smith’s, ‘Money, says the proverb, makes money’. When you have a little, it is often easy to get more. The great difficulty is to get that little.” – Jim Roth, co-founder of LeapFrog Investments

“All the headwinds didn’t kill us. Predictions of catastrophe have not come true. At the moment there seems to be a new hailstorm every 12 months or so. Every time you think there’s a path ahead, governments create some new turbulence. We just have to stay light and keep moving.”– Ric Lewis, founder of private equity firm Tristan Capital Partners

“I don’t think Brexit is going to be the black swan event.” – André Bourbonnais, President & CEO at PSP Investments