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UK and Ireland: April 2001

IPO activity slows, large buy-out market alive and well, Barings and F&C Ventures spinning out, local authorities get into private equity...

KPMG says Q1 IPO activity slowest for a decade
New issues on the London stock market ground to a near halt in the first quarter of the year, according to figures published by KPMG. This reflects the deep erosion of investor confidence that has followed the spring 2000 technology market meltdown. Only two new issues made it to the main London market in the first three months of the year - the dual listing of mobile phone company Orange and the tiny £9m flotation of Caffe Nero. ‘The IPO market is dead. This is the lowest level of activity we have seen for over a decade and there is no evidence of a pick-up,' said Neil Austin, head of new issues at KPMG Corporate Finance. There were 31 companies floated in London in the fourth quarter of 2000.
Financial Times 2.4.01

…but larger buy-out activity still healthy
Despite volatility all around, larger buy-out activity in the UK is strong and well positioned to accelerate further once broader market conditions improve, according to separate research published by KPMG Corporate Finance. It said that the total value for deals with funding in excess of £10m was £5.5bn in the first quarter, up 30 per cent from the fourth quarter, and the third highest quarterly figure on record.
eFinancial News 9.4.01

Baring Private Equity wants out from ING
Baring Private Equity has become the latest in a growing list of private equity firms to signal an ambition to escape the parental nest. It has hinted that it will either buy itself out from the ING Group or sell a stake in itself to a third party. ‘I could well imagine a number of people would find us an interesting group,' said chief executive of the firm Chris Brotchie. ‘A lot of people are looking at us.' A management buy-out would see Baring follow in the footsteps of other semi-captives, such as UBS Capital and Mercury Private Equity, that have recently detached themselves from big parent organisations.
eFinancial News 16.4.01

…and F&C Ventures wants out, too
And another one…the management team at F&C Ventures, the private equity wing of Foreign & Colonial, is also looking for a way out. The buy-out is thought to be worth slightly more than the £500m of assets it manages. The firm runs six funds and is backed by more than 50 institutional investors and 27,000 private shareholders.
Sunday Telegraph 22.4.01

PwC buys private equity advisor Coba
PricewaterhouseCoopers is to buy the Coba Group, a specialist advisor to private equity firms. The new acquisition will join with Transaction Services, PwC's business advice division, to form a new strategy group.
PrivateEquityOnline 17.4.01

SEP heads Scottish VC table
Scottish Equity Partners' success raising an extra £20m has moved it to the top of Scotland's VC league table. The SEP 2 fund was launched in August 2000 with a target of £75m but such was the demand that it was lifted to £100m. The fund, like its predecessor, focuses on financing early-stage technology companies. SEP was spun out of the Scottish Enterprise development agency last year.
Venturedome 3.4.01

Epartners returns funds
Epartners, the private equity firm established by News Corp is handing the majority of its cash back to investors. Managing partner Mark Booth said that the firm would be unable to achieve the expected returns in the time set. ‘There is still a lot of capital chasing a rapidly dwindling number of great opportunities,' he said. ‘We just don't think we can put that much money [$650m] to work effectively in the timeframe.' The firm has capped investment at $130m - enough to support its existing investments. Morgan Stanley and Softbank, two of the fund's main investors, have been released from their remaining $520m commitment.
Financial Times 26.4.01

Local authority pension fund eyes private equity
A local authority pension fund has put to tender a £100m private equity mandate for the first time. South Tyneside Metropolitan District Council's Tyne and Wear pension scheme, worth a total of £2.5bn, has restructured its investment strategy. It is in the process of switching to wholly specialist portfolios and this latest step reflects that new approach.
eFinancial News 19.4.01

…to be closely followed by another one
…and it has been joined by another newcomer to private equity - the London Borough of Newham pension fund. The London fund, valued at £330m, is tendering a private equity fund of funds mandate worth between £5m and £15m, or 1.5 per cent to 4.5 per cent of its total. It has invited up to ten managers to pitch for the business and has set a deadline for initial applications of the middle of May.
eFinancial News 24.4.01