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UK and Ireland: October 2001

BVCA sets up task force to prevent money laundering, new raft of local authority pension funds eye private equity, UK buy-out market affected by 11 September…

New BVCA task force to prevent money laundering
The British Venture Capital Association is to set up a task force to find ways of ensuring that members are not unwittingly involved in money laundering. The taskforce, headed by BVCA executive director Jennifer English, will draw up recommendations and new guidelines for member firms on the sources of their funding. It is to start work immediately and will report by the end of next month with draft guidelines and proposed recommendations. The terrorist attacks in the US have put money laundering to the top of the agenda at all types of financial services firms. Governments, particularly in the US and UK, are putting pressure on the financial world to tighten their systems to ensure that they are not inadvertently or otherwise helping terrorist organisations launder money.
AltAssets  4.10.01

Nottinghamshire pension fund moves into private equity
Nottinghamshire County Council increased its exposure to private equity with an initial commitment of £10m to the asset class. The £1.3bn pension fund is reported to be exploring private equity fund-of-funds products.
The Times  23.10.01

NWDC opens new offices
Natwest Development Capital, owned by the Royal Bank of Scotland, is set to have a better reach into the British regions by opening offices in Birmingham and Manchester. These offices add to ones already operating in Edinburgh, Leeds, London and Nottingham.
PrivateEquityOnline 9.10.01

UBS under pressure over Phildrew Ventures
Investors in the former Phildrew Ventures, the UK arm of Swiss UBS Capital, have approached rival buy-out firms to explore the possibility of running at least part of the portfolio. UBS Capital reported a second quarter loss of £148m and has largely withdrawn from making new investments. Earlier in the year, the parent company shelved plans for the private equity group to make its own buy-out.
AltAssets 15.10.01

Cambridgeshire County Council tenders private equity mandate 
Another British county council pension fund has made a foray into private equity. Cambridgeshire County Council has tendered a fund of funds mandate worth £25-35 million. A growing number of local authorities have begun to explore the asset class as a way of diversifying their portfolios. Interest in private equity has also been stimulated by the Myners report, which was commissioned by the Treasury to propose ways of improving the contribution made by institutional investors to broader economic development.
Global Money Management 19.10.01

NewMedia Spark sells three investments and reports modest improvement in liquidity 
Venture capital firm NewMedia Spark sold three investments to separate buyers, prompting the bold claim that it detects ‘a modest recent improvement in liquidity and activity levels'. The sales earned the firm £4.7m, representing a profit on the £4.3m it paid for the investments.The investments in question were in Global Euronet, Dataroam, and Clipserver.
AltAssets 30.10.01

KMS to drop venture capital arm
Knowledge Management Software is to close its venture capital arm that it started just over a year ago. The troubled IT group is reviewing all its operations as its share price stands at 14.5p from its original float price of 130p. KMS hopes to make a profit by Q4 of 2002, said chief executive David Rosalski.
The Times 29.10.01

Lincolnshire County Council tenders for private equity gatekeeper
In a move that clearly demonstrates the growing interest among local authority pension funds in private equity, Lincolnshire County Council has put out tenders for a gatekeeper or fund of funds provider to invest another £20m in the asset class. The £780m pension fund already has £25m invested through Standard Life Investments and Westport Private Equity.
AltAssets 18.10.01

Hands appoints banks to raise funds for new venture
Guy Hands' differences with his employer Nomura seem to be drifting further away from a tidy resolution with the news that he has appointed two investment banks to raise $1.8bn for a new private equity fund outside the Nomura fold. Hands, who currently manages a $10bn portfolio, has selected Merrill Lynch and Schroder Salomon Smith Barney to raise the money for the new venture.
The Times 15.10.01

BVCA urges UK government towards bolder tax reforms
The British Venture Capital Association has called on UK Chancellor of the Exchequer Gordon Brown to work harder to improve the business environment for small and growing firms. In a letter to the Financial Times, BVCA Chairman Edmund Truell urged the government to simplify some of the existing tax structures and extend the reach of incentives. The expected slowdown in the domestic economy, chiefly because of deteriorating international conditions, will substantially increase the pressure on the government to meet the demands of business and industry.
AltAssets 9.10.01
 
RLAM launches £200m private equity joint venture
Royal London Asset Management formed Royal London Private Equity, a joint venture with former Murray Johnstone managing director David MacLellan, to manage a new £200m fund that will invest in the UK and mainland Europe. Royal London agreed to commit up to £50m to the fund, which is expected to close within 12 months. RLPE will be based in London and Glasgow and will takeover the management of Royal London's existing portfolio of private equity funds and direct investments, valued at around £60m.
AltAssets 12.10.01

West Yorkshire commits to Schroders
West Yorkshire county Council is to broaden its private equity investment policy by committing £10m to a fund of funds product from Schroders. West Yorkshire is not new to the asset class, having already invested £45m to regional funds since 1990. It is hoped that the product will achieve its £274m target.
eFinancial 1.10.01

ICG announces decrease in profits and launches new loan fund 
Mezzanine firm Intermediate Capital Group has announced that its half-year pre-tax profits are down by over a third on the same period last year, reflecting the wider economic downturn. ICG's profits fell by 37 per cent to £25.1m in the half-year to the end of June 2001 on  the same period last year. Its net capital gains were down by 75 per cent to £5.9m.
AltAssets 4.10.01

Antfactory rejects shutdown claims and insists it is battling on
Antfactory, the paragon of internet incubators during the dot.com boom rejected suggestions it is on the brink of winding itself up and handing cash back to investors. Bob Gogel, vice-chairman, insists it's business as usual and says the firm is contemplating taking legal action against the newspaper that first claimed its days were numbered. The firm still has $120m cash available to invest.
AltAssets 2.10.01

Gartmore launches new £25m venture capital trust
Gartmore Investment Limited, one of the largest UK investment managers, shrugged off the uncertainty of global capital markets to launch its first venture capital trust. Gartmore Premier VCT, which will be managed by the highly rated Gartmore Smaller Companies Team, aims to raise a maximum of £25m and will invest in small listed and unlisted firms. The trust will be comprised of 25,000,000 ordinary shares available for subscription at an issue price of 100 pence. There is a minimum investment of £3,000 and a maximum of £100,000 per tax year.
AltAssets 9.10.01

UK comes out top in study
A survey by Arthur Andersen has shown that the UK is now the best place to base a high-growth business. It is hoped that this will study encourage foreign venture capitalists to plough more money into the UK. The study, which will be published later this month, found low corporate taxes, flexible labour laws and relatively low levels of bureaucracy have propelled Britain ahead of Spain, France, Germany, Italy, Sweden, the Netherlands, Austria, Belgium and even the United States as the warmest greenhouse for high-growth start-up firms. However, the British Venture Capital Association still believes there is a way to go and is calling on the Government to bring in "radical" tax incentives in next year's Budget to help plug the equity gap facing young firms.
Venturedome 10.10.01

UK buy-out market sees effects of 11 September
Conditions in the UK buy-out market are beginning to reflect the increasing uncertainty in financial markets, particularly since the terrorist attacks on the US, according to the latest research from Royal Bank Private Equity and Unquote UK Watch. Both the number and the value of deals in the £10m-plus buy-out market dipped significantly in September. Deal value fell to £21.3bn in the twelve months to the end of September, compared with a nine-year high of £23.5bn in late summer. The number of deals fell from a high of 155 in May and June to 132 in September. Price/earnings ratios also showed a declining trend and are now at levels not seen since 1996. They are currently at just below 11, compared with more than 12 or 13 for most of the past five years.
AltAssets 16.10.01