private equity Features Archive > 2004 The importance of a European stock market for growth companies 20/12/2004. It has long been recognised that the lack of a liquid stock market for growth companies in Europe is stifling the development of the private equity industry, says Jonathan Blake of SJ Berwin. Historically, Europe has lacked sizeable public markets on which promising venture-backed companies could raise capital at attractive valuations. Institutional Investor Profile: Jim Leech, Senior Vice President of Teachers' Private Capital 10/12/2004. Jim Leech on being primarily a direct investor, having the intellectual property to discern which are the better investments, and why they are not the passive 'phone us up after the deal' type of co-investor. Family Business: Why Firms Do Well When Founders Are at the Helm 07/12/2004. Despite the lack of independent directors on their boards and voting power for minority shareholders, family-run companies are still the better bet for private equity stakeholders as long as the founder of the firm is involved as chief executive officer or chairman. But, says Knowledge Wharton, if the descendent of a founder runs the company, value is lost. Institutional Investor Profile: Guy Fraser-Sampson, Founder and Managing Partner, Mowbray Capital 29/11/2004. Fraser-Sampson on bringing a home-run mentality to European venture, on the futility of trying to market time private equity, on the value of revisiting both succesful and unsuccesful fund investment decisions and on the danger of putting your eggs in too few baskets. Pensions: the new counterparty 29/11/2004. Creditors play a critical role in most business sales, says SJ Berwin. Some creditors have extensive rights: senior banks, for instance, may have a right to be repaid in full on a change of control; others, including trade creditors, play a critical part in the financial stability and working capital needs of the business going forward, even if they do not have any direct voice at the time of the transaction. International accounting standards: impact on private equity 18/11/2004. Preparations continue apace for the introduction of International Accounting Standards, which will apply to the consolidated accounts of European listed companies from January 2005, says Victoria Kershaw at SJ Berwin. And two aspects of the consolidation requirements in IAS 27 cause concern to the private equity industry. The Increasing Cost of Anti-Trust Rules 12/11/2004. Merger control rules are now a routine concern for many European buy-out houses. National and pan-European rules can delay or frustrate deals, and the importance of effective due diligence and sound strategic advice is clear to most, says SJ Berwin. But, until now, fees charged by the competition authorities themselves have not been a major issue. Asian Fund of Funds Flowering 09/11/2004. The launch of two new Asian funds of funds underscores a groundswell of global institutional interest in Asian private equity, says the APER. They argue the time appears to be ripe for establishing Asian private equity fund of funds. Institutional Investor Profile: Brian D. Isroff, Senior Managing Director, Sterling Private Investments, Inc. 02/11/2004. Isroff on the need for realistic returns expectations, on searching for managers with the X-factor, on the difficulties of pricing secondaries transactions in an increasingly competitive market and on only taking on a level risk that will allow you to sleep at night. Why China? Why Now? 01/11/2004. Anyone who has regularly attended venture capital conferences in the U.S. or Europe over the past year will have noticed the remarkable increase in the industry buzz about China, says Gil Forer and John de Yonge of Ernst & Young. Where a year ago one heard about China only from a small avant garde of venture capitalists, now panel discussions on how to make sense of the opportunities in China are de rigeur conference fare. Pair this with increasing venture capital commitments to China by the likes of 3i, Nokia Ventures, Intel Capital, Motorola Ventures, Warburg Pincus and The Carlyle Group, and the rush from West to East is on. European Venture Roundtable 11/10/2004. The risks and rewards of private equity investing in European venture are examined by Barun Dutta of Alta Berkeley, Jörg Uberla of Wellington Partners, Staffan Ingeborn of Innovations Kapital, and Francis Carpenter of the European Investment Fund. Institutional Investor Profile: Bill Quinn, President, AMR Investments 27/09/2004. Quinn on the overriding correlation between experience and performance, on the importance of ensuring that the general partner only makes money when you do, on private equity's descent into the retail market and on large-cap funds that have outgrown themselves. The mid-market - differentiate or die 24/09/2004. Competition for deals in the European mid-market is becoming increasingly fierce and only those firms able to stay ahead of the crowds will succeed in generating attractive returns. There can be little doubt that the days of the vanilla buy-out are dead and that differentiation is now key, according to Philip Conboy, director of Sovereign Capital. Institutional Investor Profile: Rupert Montagu, Co-Founder and General Partner, Montagu Newhall 20/09/2004. Montagu on the value of identifying quality emerging management teams in their early years, on the importance of gaining vintage year diversification, on a shift in the balance of power between entrepreneurs and VCs and on the crack that is just beginning to appear in the IPO window. US buy-out firms make themselves at home in Europe 13/09/2004. US buy-out firms have become much more than just visitors in the European market. They have become permanent fixtures. Chris Davison asks just how that came about and what can be done to stop them going further. Institutional Investor Profile: Mark R. Pattis, Chief Executive Officer, Next Chapter Holdings 01/09/2004. Pattis on the potential for returns in emerging markets, on the importance of a cohesive general partner team, on the issue of generational transfers and management motivation, and on why family offices can make very attractive LPs. Institutional investor profile: Colin Ambrose, Senior Investment Officer, Wesleyan University 25/08/2004. Ambrose on the advantages of secondaries funds for new investors, on the importance of identifying motivated management teams, on the inevitability of consolidation in the private equity industry and on the need for heightened due diligence for first time funds. BDCs: Is Private Equity Going Public? 09/08/2004. By now, anyone with more than a passing interest in the private equity industry is aware of the recent spate of initial public offering filings for business development companies that have taken place following Apollo's success in raising $930 million in April. But what does this mean for the industry as we know it? Are BDCs the death knell of traditional private equity, as a few pundits have suggested, or are they simply the latest 'flavour of the month'? The truth lies somewhere in between, according to Kathy Fields and Edwin Pease of Testa, Hurwitz & Thibeault. What's up in Central and Eastern Europe? 28/07/2004. The risks and rewards of private equity investing in Central and Eastern Europe are examined by Neil Milne of Copernicus Capital Partners, Tod Kersten of Enterprise Investors, and Bill Watson of Baring Private Equity Partners Central Europe in the latest AltAssets roundtable. Institutional investor profile: Michael Granoff, President and CEO, Pomona Capital 27/07/2004. Granoff on survival of the fittest in a Darwinian private equity industry, on the question of access and the challenges it presents investors, on what the future holds for the secondaries market and on paying the right price for quality assets. Deregulation of the US electric power industry and the opportunities it creates for private equity 22/07/2004. Fundamental upheaval in the electric power industry is creating unprecedented private equity investment opportunities. One major contributing factor is the deregulation of the United States power markets. Since the advent of deregulation, the private equity industry has assumed a lead role in taking advantage of these opportunities, bringing benefit to its investors, the power industry, and the energy-using population, according to John Buehler of the Energy Investors Funds (EIF). Institutional Profile: Tom Kennedy, founder and managing director, Kensington Capital Partners 21/07/2004. Kennedy on where Canadian private equity steals a lead from the US, on the ability to succeed regardless of market conditions, on vintage as the key diversifier and on doing your research on management. A blurring of the lines between public and private capital 15/07/2004. The past six months have seen an unprecedented blurring of the lines between public and private capital in the UK. There are those that believe this trend will turn out to be little more than a flash in the pan, a transitional effect as normal business returns to the public markets. But an increasing number of industry players are accepting that the boundaries have been irrevocably altered and that we are experiencing a seismic shift in the equity capital markets from which there is no turning back. A blurring of the lines between public and private capital 14/07/2004. The past six months have seen an unprecedented blurring of the lines between public and private capital in the UK. There are those that believe this trend will turn out to be little more than a flash in the pan, a transitional effect as normal business returns to the public markets. But an increasing number of industry players are accepting that the boundaries have been irrevocably altered and that we are experiencing a seismic shift in the equity capital markets from which there is no turning back. Institutional investor profile: Terry Sullivan, managing director, Paragon Advisors 08/07/2004. Sullivan on the importance of good chemistry in an LP/GP relationship, on the value of operational experience in a management team, on the rise of BDCs and the arrival of private equity in the retail market and on how egocentric GPs can deter potential investors. Centrica AA: Inside the contract race 05/07/2004. Auction sales have long been a major transaction source for private equity houses, but at the same time a source of constant complaint. Christopher Bown, co-head of private equity at Freshfields Bruckhaus Deringer, examines the recent AA deal and asks whether Centrica’s behaviour during the auction was a special case, or whether it was a sign of sellers’ increasing disenchantment with the process as a whole. Institutional Investor Profile: Rainer Busch, managing partner, Mercury Partners 28/06/2004. Busch on transparency and valuation techniques, on why European venture has failed to set the world on fire, on avoiding over crowded markets, and on why the best opportunities in the secondaries market are now in the past. The (re) emergence of energy technology 21/06/2004. Over the past year, energy technology has been the subject of escalating interest from the venture community and its institutional investor base. Investment activity in areas such as alternative energy, emissions control, and energy management continues to increase, led largely by a handful of small, pioneering venture firms as well as several large, generalist funds that are making their first forays into the sector, according to Vincenzo La Ruffa of EnerTech Capital. Institutional Investor Profile: Alex Bangash, managing director, Rumson Capital Advisors 14/06/2004. Bangash on a changing of guards in the venture market, on identifying the franchise funds of the future, on the importance of self knowledge and on keeping an open mind. Success and succession 04/06/2004. As the European private equity industry has grown and matured, limited partners in European funds have become increasingly anxious about the issue of succession. Ray Maxwell of INVESCO examines the validity of these concerns and takes a look at what the future may hold for private equity firms who have lost their founding partners. Institutional Investor Profile: Charl Pienaar and Steve Whatmore, Investment Managers, MLC Investment Management 27/05/2004. Pienaar and Whatmore on private equity opportunities in the Asia-Pacific region, on the risk of rejecting a great manager, on the dangers of excessive capital inflow into the industry and on the importance of looking before you leap. What's up in life sciences? 24/05/2004. The risks and rewards of the private equity life science market are examined by Tom Daniel of Schroder Venture Life Sciences, Mark Carthy of Oxford Bioscience Partners, Martijn Kleijwegt of Life Science Partners and Jeremy Curnock Cook of Bioscience Managers in the latest AltAssets roundtable. Institutional Investor Profile: Greg Uebele, Assistant Investment Officer: Private Equity, Ohio Public Employees Retirement System (OPERS) 19/05/2004. Uebele on working with consultant groups, on the dangers of a misalignment of interest between GPs and LPs, on the importance of remembering the fundamentals of supply and demand and on managing returns expectations in the future. Hedge Funds: A threat to Private Equity? 10/05/2004. Due to various common characteristics, private equity and hedge funds are often mentioned in the same breath. Some investors have even come to view the two asset classes as being in direct competition with one another. Dr. Isabelle Borello and Dr. Hanspeter Bader of Unigestion argue that the comparison is often over simplified and that rather than representing a substitute for private equity, hedge funds can provide a rewarding complimentary investment strategy. Institutional investor profile: David Andryc and Steve Wesson, managing directors of Auda Group 04/05/2004. Andryc and Wesson on the need for consolidation in the venture industry, on the dangers of over diversification, on steering clear of the flavour of the month, and on the question of appropriate returns in the private equity industry. Institutional investor profile: David Andryc and Steve Wesson, managing directors of Auda Group 04/05/2004. Andryc and Wesson on the need for consolidation in the venture industry, on the dangers of over diversification, on steering clear of the flavour of the month, and on the question of appropriate returns in the private equity industry. Are LPs willing to take a chance on Israel? 28/04/2004. It has been 11 years since the Israeli government launched the nation's venture capital industry with the creation of nine venture capital funds. Over the last decade these firms have weathered the superlative highs and lows of the venture cycle and are now ready to hit the fundraising trail for the fourth time. But with global investor appetite for the asset class, cautiously optimistic at best, why should limited partners tentatively re-exploring the venture space, look to a politically turbulent nation with a population of just six million? Amy Carroll reports. Q1 fundraising signals clearer skies ahead 28/04/2004. The first quarter of 2004 has demonstrated a marked improvement in global fundraising performance. But while for US teams a recovery seems well underway, the European private equity industry will have to wait a little longer before it can finally breathe a sigh of relief. Institutional investor profile: Sara McMahon and Trey Thompson, co-managing directors, UTIMCO 19/04/2004. McMahon and Thompson on the importance of investing with hungry private equity managers, on avoiding the herd mentality, on being tough on terms and on how to live with disclosure. Institutional investor profile: Brad Kelly, Paul Fetsch, Paul Gompers and Joan Heidorn, general partners, Spur Capital 06/04/2004. Kelly, Fetsch, Gompers and Heidorn on gaining access to the best venture funds, on the value of operating experience in a venture capital management team, on the need for patience and discipline when putting together a private equity portfolio and on Israel, the rising star of the global venture industry. Accession provides new opportunities for private equity investment in Central Europe 30/03/2004. Ten new members will be joining the European Union on May 1st this year, eight of which will be formerly communist countries from Central and Eastern Europe. The expansion of the EU will be accompanied by a wealth of private equity opportunities in these newly integrated states, but the window of opportunity is narrowing fast, according to Joanna James of Advent International. Institutional investor profile: Alex Scott, senior investment manager, West Midlands Pension Fund 22/03/2004. Scott on the opportunities emerging in PFI and infrastructure funds, on picking the wheat from the chaff and on the importance of diversification. Quart into a Pint Pot 15/03/2004. A significant number of high profile private equity firms are expected to try and replenish their coffers over the next 18 months. But the fundraising trail will remain a rocky path to travel. As some funds reach their targets with consummate ease while others struggle to make any headway at all, Ray Maxwell of INVESCO explains what LPs are really looking for in today's challenging environment. The Israeli venture story, a GP's perspective 08/03/2004. High-tech venture capital activity in Israel, a country with a population of just six and a half million, is equal to half of that in the whole of Europe. Ed Mlavsky, chairman and founder of Gemini Israel Funds, explores the root of the Israeli entrepreneurial spirit and looks ahead to what the future may hold for the nation's venture industry. Institutional investor profile: John Otterlei, Senior Managing Director, Piper Jaffray - Private Capital Group 02/03/2004. Otterlei on the improving shape of the US venture industry, on the need to address private equity fee structures, on the importance of proprietary deal flow and on looking for firms with a good batting average. What's up in secondaries? 24/02/2004. The secondaries market has experienced a period of rapid growth over the past two years. Flourishing deal flow combined with a handful of recent high profile mega-fund closings indicate that 2004 is set to be another bumper year for the sector. But is this level of growth sustainable or are we in the midst of another private equity bubble? We ask a panel of specialists for their view on what's happening in the market. Institutional investor profile: Tom Danis, Managing Principal, RCP Advisors 18/02/2004. Danis on the importance of integrity in a fund manager, on the increasing difficulties involved in gaining access to the best performing funds, on the potential dangers lurking in limited partnership terms and conditions and on the rigours of thorough due diligence. The giant engine who could? 10/02/2004. The German private equity industry has struggled to live up to its much touted promise over recent years, but Brian Veitch of Electra Partners Europe believes that the market could finally be turning a corner. Here, Veitch examines the stumbling blocks that have held Germany back in the past and looks ahead to better times for those private equity firms prepared to roll up their sleeves and to really get involved in turning their portfolio companies around. Institutional investor profile: John Holloway, Director of Operations, European Investment Fund 03/02/2004. Holloway on the improving exit market in Europe, on why venture capital is still an asset class worth considering, on the importance of equality among LPs and on where the EIF is planning to invest its new capital from the European Investment Bank. What is the market on terms? A new look at an age-old question 28/01/2004. With so many funds slated to be out on the fundraising trail over the next 18 months or so, many firms will be wondering how they should structure their terms and conditions. Robin A Painter of Testa, Hurwitz & Thibeault takes a look at some of the areas of concern for potential limited partners. Institutional investor profile: George Kintis, CEO, TANEO 21/01/2004. Kintis on the promise of the Greek market, on reconciling government backing with commercial objectives, on the importance of integrity and on why it’s make or break time for the industry. A case of Chinese whispers? 20/01/2004. China’s economic reforms over the last ten years and, in particular, its entry into the World Trade Organisation in 2002, have elicited a huge amount of interest among the braver private equity firms of the world. Previous attempts in the early 1990s at cracking the market invariably faltered, but is the current enthusiasm for China any more justified? A happy and prosperous 2004? 14/01/2004. Glad to see the back of 2003? You wouldn’t be alone. But will 2004 be any better? We reflect on the highs and lows of last year and highlight some of the developments anticipated over the next 12 months. Institutional investor profile: Paul Rice, Senior Managing Director, Private Equity, Mesirow Financial 07/01/2004. Rice on the amount of dollars flowing into private equity and how that will affect returns, on judging teams with a problem fund, on the importance of people and on what proprietary deal flow really means. Decision-making in the digital age 07/01/2004. Private equity investing is undoubtedly a data-intensive activity. And yet most firms and their investors do not have adequate systems in place to convert all that information into knowledge to help make the right decisions, says Initium Capital’s Mark Montgomery. Here, he explains why the industry should increase its focus on knowledge system architecture.