Click here for printer friendly page

Continental Europe: April 2001

Phoenix breaks free from CSFB, Easdaq and Nasdaq to merge, Italy's first fund of funds, European private equity figures, Germany's M&A boom...

Easdaq shareholders back Nasdaq bid
Shareholders in the struggling pan-European high-tech Easdaq exchange have given their unanimous backing to a $70m takeover bid from US stock market Nasdaq. The bid will hand Nasdaq 51 per cent of the market. It will be renamed Nasdaq Europe.
Wall Street Journal Europe 2.4.01

Phoenix rises from the ashes of DLJ European Private Equity
DLJ's European Private Equity group has bought its way out of CSFB and will be renamed Phoenix Equity Partners. The exact terms of the deal are unclear, but it promises Phoenix independence after more than three years under DLJ's sizeable wing. Following CSFB's acquisition of DLJ, the two groups were understood to have agreed that their overlapping private equity businesses justified the spin-off. Phoenix dates back to 1991 but was taken over by DLJ in 1997. Hugh Lenon, co-founder and managing partner of Phoenix since before its absorption in to DLJ, said the separation was amicable and that the two parties would retain some links.
eFinancial News 2.4.01

Italy gets its first fund of funds
Italy now has its first private equity fund of funds. Mediolanum State Street - the joint venture between State Street Global Advisers and Mediolanum - has announced the first $141.8m closing of its Fondamenta fund of funds. Fondamenta plans to invest up to 70 per cent of its capital in Italian private equity funds and the rest in Italian co-investments.
PrivateEquityOnline 30.3.01

Yet more tax incentives for Italian investment
The Italian government has pushed through further tax reforms that promise a boost for investors in the country's fledgling private equity industry. Corporate income tax is set to fall from its current level of 37 per cent to 35 per cent by 2003, dual income tax relief has been extended, and the substitute tax rate for company reorganisations has been cut to 19 per cent from 27 per cent.
EVCA Network News April

Softbank merges its European funds
Softbank International Ventures, part of Softbank Japan, is merging its UK and continental European funds into one $600m fund to be called, appropriately, Softbank Europe Ventures. Eric Hippeau, president of Softbank International Ventures, will be executive managing director.
PrivateEquityOnline 27.4.01

More alternative assets for Swissair pension fund
Swissair's giant VEF pension fund is planning to increase its exposure to alternative assets to around 30 per cent over the next two years from its present level of about 20 per cent. ‘We want to increase our holding in this asset class for diversification,' said Reto Kuhn, the fund's managing director. ‘The asset class has no correlation with our other assets, which is also attractive. It also gives protection against shortfall in case of a stock market crash.' VEF currently allocates 15 per cent of its fund to private equity and five per cent to hedge funds and the increase will be at the expense of cash, bonds, and property. Kuhn predicted that other pension funds were likely to follow the same route.
eFinancial News 18.4.01

Finnish CapMan buys Danish investor
The Finnish private equity firm CapMan has taken over Danish firm Nordic Private Equity in an all-share deal said to be worth about €1.9m. CapMan said the deal, which represents only about 1.6 per cent of its share capital, would help with its expansion plans in the Nordic region, while NPE said it hoped the deal would bolster its position in technology investments.
PrivateEquityOnline 12.4.01

More German companies considering delisting
The rising tide of equitisation across Europe is not irresistible after all, according to the Financial Times. The paper says that more and more mid-sized German firms are becoming disillusioned with listed life and are thinking seriously about going from public back to private. It says the trend would already have been more prevalent had it not been for legal obstacles. But it may turn out to be good news for the Germany's burgeoning private equity industry. The FT says that there is a growing acceptance of private equity in Germany and family-owned companies are increasingly looking to it as a way of resolving succession issues.
Financial Times 1.5.01

Another burst of Italian activity
The Italian private equity industry enjoyed a bumper year of investment in start-ups and buy-outs in 2000, according to the Italian Venture Capital and Private Equity's (AIFI) latest figures. Investment jumped 67 per cent on the previous year. New capital raised increased by an equally impressive 33 per cent. The association expressed some caution about this year's prospects for early-stage investment - as has become the vogue - but it said that there was still plenty of money to be invested.
TheDeal.com 18.4.01

France Telecom's venture arm expands
Innovacom, the venture capital arm of France Telecom, is to extend its reach beyond its home ground and Silicon Valley by opening offices in Stockholm and Tokyo. The business, which unsurprisingly specialises in telecom-related start-ups, will be scouring its new realms for small firms developing hardware and software for mobile and fixed networks.
The Industry Standard Europe 11.4.01

European private equity investment collapses - or does it?
Private equity investment from early stage to buy-out has collapsed across Europe, according to a report from Thomson Financial's Venture Economics. First quarter investment fell to $5.5bn from $13bn in the fourth quarter of 2000. The report said that France was the only European country to buck the depressing trend in fund raising. But the Centre for Management Buy-Out Research (CMBOR) had a different story to tell. Its survey of buy-out activity counted 128 deals worth a total of £5.7bn (€9.1bn), which it said ranked the period as best ever start to a year and the third highest quarter ever by value.
eFinancial News 17.4.01

Commerzbank predicts German M&A boom
Long-awaited tax reforms in Germany will trigger an explosion in merger and acquisition activity, according to a report by Commerzbank. It predicts that the removal of capital gains tax on the sale of corporate stakeholdings will clear the way for €600bn of takeover activity as firms finally have the incentive to divest some of the their non-core assets. The report, The German Tax Reform: Change Tax and You Change Everything, says that the big winners from these sweeping fiscal reforms and the ensuing corporate restructuring will be private equity firms and M&A advisory boutiques. ‘Germany is the Eldorado of private equity,' said Commerzbank analyst Rolf Elgeti. ‘There's lots of opportunity; forced sellers, which means good prices; and all the profits you make are non-taxable.'
eFinancial News 02.04.01

Private equity drives PGGM's top performance
Investment in private equity helped power the Dutch pension fund PGGM ahead of the WM company's weighted average benchmark, a spokeswoman for the fund said. PGGM achieved a return of 3.4 per cent, 0.8 percentage points above the median Dutch fund return of 2.6 per cent. ‘We decided to put more into private equity as a result of an asset liability management study in 2000 and it has given us large profits,' Ellen Habermehl said. PGGM invests its private equity through Dutch investment bank NIB Capital and currently allocates about 7.5 per cent of its fund to the sector.
PrivateEquityOnline 5.4.01

Hewlett Packard dives into European corporate venturing
Hewlett Packard has plunged into the busy pool of European corporate venturing for the first time by becoming the twelfth member of the Swedish group B-Business Partners. HP will provide advice on e-business and technical help as it attempts to muscle its way into a market already crowded by big technology giants such as Intel and big local players like British Telecom and Nokia. B-Business Partner's CEO Hans-Dieter Koch welcomed HP's monetary contribution but said its e-business skills were a more important part of the relationship.
The Industry Standard Europe 24.4.01

Investors explore Poland's undeveloped technology front
Four early-stage investors are expanding their operations in Poland to take advantage of the country's relatively undeveloped technology sector, according to Tech Finance. Softbank opened an office in Warsaw last month and a handful of local operators have recently signalled their intention to pursue technology opportunities ‘more aggressively' with new funds or larger staff, the report says.
Institutional Investor Online 15.4.01

Bridgepoint Capital strengthens presence in Germany
UK private equity firm Bridgepoint Capital is beefing up its German operations with some chair-switching and a handful of new appointments. The centrepiece is the move from Dusseldorf to the Frankfurt HQ of Wolfgang Lenoir, managing director of the firm's German business. He is joined by Michael Maxeiner, previously of West Private Equity, and Hamish Grant, from Bridgepoint's London office. The shake-up comes in anticipation of an explosion in merger and acquisition activity after major German corporate tax reforms start taking effect.
eFinancial News 3.5.01