Click here for printer friendly page

Western Europe & Israel: June 2003

Deutsche Bank to sell $550m of collateralized fund obligations, Schroder Ventures closes $400m life sciences fund, UK private equity firms lose faith in non-executive directors and ABN Amro forms new private equity subsidiary…

UK private equity firms take a more proactive approach to portfolio management
Private equity firms are taking an increasingly proactive approach to portfolio management in the light of more challenging exit conditions, according to a report released by KPMG Corporate Finance. Insight into portfolio management 2003, produced in conjunction with Manchester Business School, said firms were devoting more time and resources to monitoring investments and employing wider industry knowledge and operational expertise in doing so.
AltAssets 26.6.03

UK Abingworth Management to raise ninth fund
UK Abingworth Management, the life science venture capital firm, has launched its ninth private equity fund. The fund is Abingworth's fourth focused exclusively on life sciences sectors and is targeting $275m. The fund is called Abingworth Bioventures IV and follows Abingworth Bioventures II, which closed in December 2001 after raising $225m.
EVCJ June 2003

Goldman Sachs appoints EQT chairman Dahlback as non-exec director
Claes Dahlback, the chairman of major Nordic buy-out firm EQT, has been appointed a non-executive director by US investment bank Goldman Sachs. He is also chairman of listed Swedish investment firm Investor AB. Goldman's also named Edward Liddy, chairman and chief executive of The Allstate Corporation, to its ten-person board.
AltAssets 26.6.03

Proventure nears close for latest fund of funds
Proventure is nearing a final close for its European Fund Investments II. The firm hopes to have raised E150m by the end of June. The fund of funds vehicle will target European opportunities across a broad range of industries and types of investment, in funds seeking to raise between E100m and E500m. A third of the capital is targeted at venture funds with the rest for buy-outs and structured finance situations. The firm says it will consider investing in new funds set up by investors with an experienced track record.
Real Deals 5.6.03

Halder launches E150m buy-out fund for Germany
German and Dutch-based Halder has announced that it is in the process of launching a E150m buy-out fund for Germany. The new fund will focus on family-owned small and medium-sized enterprises (SMEs). In Germany there are more than 11,000 primarily family-run companies with sales ranging from E25m to E125m. This potential has attracted considerable private equity interest in the German market in recent years but, as yet, hopes of completing a large number of transactions have regularly been disappointed. Halder believes that the challenging economic conditions currently facing the German market offer excellent investment opportunities for a firm with the patience and persistence to gain acceptance by Germany's wealth of SMEs.
AltAssets 25.6.03

EVCA calls for new European tech exchange
The European Private Equity and Venture Capital Association (EVCA) has thrown its weight behind the idea of creating a new European stock market for high-growth companies. The EVCA's initiative claims to address a gap in Europe's technology and venture capital industries and if implemented, would provide a much needed exit route for high-growth companies.
eFinancial News 16.6.03

Innovacom reaches first close at E50m but France Télécom reduces commitments
Innovacom, the European early-stage telecom and information technology venture firm, has completed a first closing of over E50m on its new fund, Innovacom 5. The fund is targeting E100m. Innovaom 5 has received commitments from Access Capital Partners, AGF Private Equity, CIC Finance, the European Investment Fund and France Télécom. But despite being Innovacom's major shareholder, France Télécom has committed just ten per cent of the E50m raised. The E5m commitment contrasts sharply with the E30m invested in Innovacom IV, which held a final close at E200m in July 2000.
AltAssets 16.6.03

Harald Mix closes debut Altor fund on E650m
Former Industri Kapital executive Harald Mix has closed his debut fund comfortably ahead of target on E650m. Altor Equity Partners, which appears to have had a much easier time fundraising than IK, will invest in mid-market firms in the Nordic region. Altor raised its capital from 40 institutions, both Nordic and international. They included Adams Street Partners, Allianz Capital, Goldman Sachs Private Equity Group, NIB Capital Private Equity, Princeton University Investment Company, Skandia Life Insurance Company, and Standard Life Investments.
AltAssets 2.6.03

Austrian private equity in bid to ‘catch up' with other EU markets
Austria has defied a difficult fundraising environment by showing a growth of nearly 30 per cent in the amount of capital raised by its private equity industry in 2002, according to statistics compiled by the Austrian Private Equity and Venture Capital Organisation. Austrian private equity firms managed to raise E177m in 2002, the highest level since 1999. In contrast, European private equity as a whole raised just E27.5bn last year as opposed to E40bn in 2001, according to EVCA figures. Despite the increase in funds allocated to private equity, which suggests a heightened confidence in the asset class, private equity investment activity in Austria has remained relatively static, falling by one per cent. A lack of viable exit opportunities also continues to hinder the industry.
AltAssets 10.6.03

SVIIT creates new investment vehicle to raise cash for Permira mega-fund
UK-based Permira, the private equity buy-out house currently raising Europe's largest ever private equity fund with a target of E4.95bn, may end up receiving commitments from investors with as little as a tenth of the minimum stake usually required. Fund of funds firm Schroder Ventures International Investment Trust (SVIIT) has created a new fund for clients with E1m or more to invest in the mega-fund. The usual minimum commitment required to gain access to Permira's fund is E10m.The new fund, called P123, offers a stake in Permira's last two funds as well as in the new pool. Credit Suisse First Boston is managing P123's fundraising. SVIIT is transferring approximately 20 per cent of its investments in Permira's last two buy-out funds into P123. This transfer will free up capital and allow the firm to invest more of its own money directly into the new Permira fund.
AltAssets 20.6.03

Two European VCs to create top-up funds despite tough fundraising conditions
Two European venture capital firms are understood to be adding top-up funds to the amounts they raised just months ago, despite one of the harshest fundraising environments in private equity's history. Ireland's ACT Ventures, which closed Europe's largest venture capital fund on E170m in January, and German PolyTechnos Venture Partners, which closed an E130m high-technology fund in March, are both raising annex funds.
eFinancial News 2.6.03

Vintage Venture Partners launches Israel-focused secondary fund
Israel-based Vintage Venture Partners has announced the launch and first close of its debut secondary fund. The fund is targeting $60m and has already secured $30m of commitments. The fund will focus on purchasing limited partnership interests in Israel-related venture capital funds and direct portfolios of Israel-related technology investments. The fund expects to hold a final close towards the end of this year.
AltAssets 27.6.03

German Triangle Venture Capital launches fourth fund
Triangle Venture Capital has launched its fourth early-stage venture capital fund. Triangle Fund IV is targeting E50m to E75m and is expecting to hold a first closing by the end of 2003. Since its inception in 1997 Triangle has invested in 11 start-up companies in the knowledge management and recognition software, and lasers and medical devices sectors. The firm has committed a total of E46m including co-investments.
AltAssets 26.6.03

EBRD and Greek Global Finance launch E20m private equity fund
The European Bank for Reconstruction and Development (EBRD) has joined forces with the largest private equity firm in South-East Europe, Greece-based Global Finance, to launch a private equity fund investing in small and medium-sized enterprises in Bulgaria and Romania. Other investors include Bulgarian Post Bank, Banc Post Romania and the European Commission. The EU/EBRD SME Finance Facility will contribute E6.5m. The fund has currently received E16.5m in commitments, but hopes to raise up to E20m.
AltAssets 12.6.03

Dresdner in talks to sell E1.3bn private equity portfolio
Dresdner Bank is in talks about selling its E1.3bn private equity portfolio. The beleaguered German banking group has held talks with several finance houses to dispose of its investments in more than 200 buy-out funds and about E250m of direct investments in private companies. Discussions about the private equity portfolio have already been held with London-based secondary buy-out house Coller Capital, as well as Dutch finance group NIB and US fund manager Harbourvest.
Real Deals 19.6.03

Mega-deals return to UK buy-out market
Mega-deals have returned to the UK buy-out market, according to the Centre for Management Buy-out Research (CMBOR), sponsored by Barclays Private Equity and Deloitte & Touche. Nine transactions valued at over £100m have taken place in the second quarter of this year, with six mega-deals announced in June alone. Total deal value for the second quarter of 2003 is £3.8bn, up by just £284m on the previous quarter, producing an average quarterly value of £3.6bn between quarter three 2001 and June 2003. But despite this pick up in the market, firms are finding it increasingly difficult to exit investments. The report reveals that only 92 exits have been completed in 2003 so far, a third of the 271 realisations achieved in 2002.
AltAssets 30.6.03

EVCA poll finds most GPs think more transparency will professionalise private equity
Greater disclosure of private equity fund performance would help professionalise the asset class, according to the findings of an EVCA poll undertaken in the first quarter this year. Some 68 per cent of the general partners that responded said a higher level of transparency would attract more investment to European private equity. The poll also found that European general partners believed that in order for private equity to be portrayed in a fair light, data disclosure must be accompanied by a clear explanation of the way the asset class works. This should include an explanation of the investment life cycle, demonstrating that internal rates of returns are not meaningful in the early years of the fund's life.
AltAssets 4.6.03

Ansbacher wins E700m Englefield private equity mandate
Englefield Capital has given Ansbacher its first large private equity mandate by outsourcing administration of its new E700m fund. Ansbacher hopes that by winning this mandate it will gain access to other private equity firms that have traditionally performed administration in-house or have used third-party providers based in less rigorous jurisdictions than the UK.
eFinancial News 16.6.03

Signs of revival for UK IPO market
The UK initial public offering (IPO) market saw the first signs of life for over a year with two new trading company listings this month, according to new research carried out by KPMG. The outlook, however, remains fragile and it is too early to celebrate a recovery, the report cautions. The listing of oil and gas company, Sondex, and reinsurance broker, Benfield, bring the amount of funds raised from a total of seven IPOs to £319m for the year to date.
AltAssets 26.6.03

BBC hopes to attract VCs to spin-out units
The British Broadcasting Corporation (BBC) has launched an investment vehicle to spinout in-house commercial products and businesses. It will look to attract investment from UK and European venture capitalists in the spin-out business. The new venture, BBC Vecta, has been formed to commercialize software and technology innovations developed by its in-house research and development teams. Money raised from successful spin-outs will be used to help fund BBC programming.
Real Deal 5.6.03

UK private equity industry demonstrates increased confidence in economic outlook
The UK private equity industry expects to see an improvement in the overall business climate over the next three months, according to the British Venture Capital Association (BVCA) second quarterly Confidence and Attitudes Survey. The survey reveals that the number of UK private equity firms that predict an improvement in market conditions in the next quarter has more than doubled in just three months, having increased from 14 per cent in March to 37 per cent in June. Only three per cent of the industry predicted a decline in the business climate.
AltAssets 30.6.03

Deutsche Beteiligungs reports slight profit for first half of financial year
Germany's oldest private equity firm, Deutsche Beteiligungs, has reported slight profits for the first half of the financial year. The firm has also announced the second close of its latest private equity fund. The firm recorded a consolidated net income of just E100,000 for the first half of the year, compared with a net loss of E1.8m for the same period last year. The value of the Deutsche Beteiligungs' portfolio has remained relatively stable but exit opportunities remain scarce. Deutsche Beteiligungs has also announced the second closing for its fourth private equity fund with total commitments to date of E180m. A final close is expected to be held in late summer.
AltAssets 13.6.03

German private equity community shrinks by a third
The number of people working in the private equity industry in Germany dropped by 32 per cent last year. Still more expect to loose their jobs this year as activity dries up, according to a report released by the Organisation for Economic Development (OECD).  The OECD's figures show the number of UK private equity professionals also fell, but only by eight per cent, while the number across the rest of Europe increased.
eFinancial News 16.6.03

European bankers believe things are looking up for Europe's private equity industry
Almost two-thirds of European bankers expect private equity to increase its share of the European mergers and acquisitions market in the second half of 2003, according to the latest figures released by the Cinven Index. The six-monthly survey of investment banks, which collates and analyses mergers and acquisition market sentiment in the region, also found that a third of bankers expect the overall economic climate to improve, compared with only ten per cent in December 2002. Just 12 per cent expect deterioration in conditions, down from 47 per cent six months ago. In further good news for the private equity industry the survey also suggests cautious optimism about the prospects of the IPO market with 44 per cent seeing a greater number of flotations over the next half year, compared with 21 per cent six months ago.
AltAssets 23.6.03

Court ruling could make it easier for private equity firms to operate in Germany
A landmark decision by the German Federal Court of Justice could make it easier for international private equity firms to operate in the country. Before the ruling, UK private limited companies that moved to Germany were not recognized as such in law, but were viewed as partnerships whose partners faced unlimited personal liabilities. The decision could remove certain legal pitfalls and roadblocks that surprise and often frustrate investors in Germany and so may free up the country's private equity market.
Real Deals 19.6.03

French AXA Private Equity foresees first close at E120m in July for fund of funds
AXA Private Equity, the private equity operation of French insurance group AXA, has predicted an E120m first close for its second fund-of-funds in July.The fund is targeting E250m and AXA anticipates that this will take place by the end of this year. The fund will invest in the US and Europe, principally in the early secondary market. The firm will take secondary positions in funds that are already 20 per cent to 50 per cent invested but will also make some primary fund commitments.
AltAssets 5.6.03

Greek government raises fund of funds through bond market
The Greek government has turned to bond markets to raise E105m for investment in a new private equity fund of funds. The New Economy Development Fund (TANEO) was structured by Westport Private Equity, which will also manage the fund. The Greek government has put E45m of initial cash into the fund and has guaranteed an additional E105m of bonds. The fund will invest in venture capital funds in the Greek market.
AltAssets 18.6.03

German DVC shuts Berlin office as venture market slows
Early-stage investor Deutsche Venture Capital (DVC) has undergone a major shake-up and restructuring. The firm has closed its Berlin office and will now concentrate its efforts on Munich. Three Berlin investment managers will move to Munich while a further two will leave the firm. A DVC spokesperson has also confirmed that there have been discussions within the firm about a potential buy-out, but said that the topic was now considered shelved.
Real Deals 5.6.03

French Eurazeo to raise E800m in new funds in bid to build private equity activity
French investment company Eurazeo is planning to launch E800m of new funds this year to underpin its transition from a listed investment holding company into a private equity firm. The first round of funding is expected to be announced before the end of the year. Eurazeo will contribute between 25 and 40 per cent of its own capital to the funds. The firm plans to free up this capital by selling off 25 per cent of its shareholdings.
AltAssets 26.6.03

Deutsche Bank to sell $550m of collateralised fund obligations
Deutsche Bank is seeking to further reduce its exposure to private equity with the sale of $550m of collateralised fund obligations. The securities for sale are backed by over 700 underlying portfolio companies. The Deutsche Bank deal involves 65 funds to which the firm originally committed $770m. The firm has contributed a total of $615m to date. 53 of the funds are buy-out, six are venture capital funds and the remaining four are distressed and mezzanine
AltAssets 4.6.03

European private equity picks up in 2002 but technology investments continue to fall
European private equity investments in the technology sector have continued to fall in 2002 despite the fact that cross-industry investment enjoyed its second best year to date, according to the PricewaterhouseCoopers' Money for Growth survey. For European private equity as a whole there was a 14 per cent increase in the value of investments compared with the previous year. But the technology sector suffered a drop in investment of almost 30 per cent from 2001 and 50 per cent from its peak in 2000. The proportion of technology private equity investment going into buy-outs almost doubled from 15 per cent in 2001 to 25 per cent in 2002, due to the rapid rise in major corporations selling off non-core assets. But the proportion of private equity being invested at early and expansion stages fell significantly from 81 per cent to 68 per cent and the proportion invested in seed-stage projects has fallen to just a little over one per cent.
AltAssets 23.6.03

Schroder Ventures closes $400m life sciences fund
Schroder Ventures Life Sciences (SVLS) has closed its third life sciences private equity fund at $402m. ILSF III has attracted commitments from 18 new investors evenly distributed between the US, UK and continental Europe. ILSF III will follow its predecessors in providing start-up, early-stage and expansion capital to life sciences companies in the US and Europe. The fund will invest in a range of life sciences sectors including biotechnology and pharmaceuticals, medical devices and instruments, healthcare IT and healthcare services. The fund will typically invest between $5m and $20m.
AltAssets 4.6.03

Dramatic increase for Sweden's seed deals
The Swedish seed-financing market is showing signs of improvement, with a host of new dedicated early-stage funds set to start investing this summer. The latest survey of the Swedish private equity market showed that these funds will bring in around E90m in new seed capital to the market. Investment in the seed and start-up stages was up by more than 60 per cent on the previous quarter.
Real Deals 19.6.03

Italian Cape to launch private equity fund
Italian Cape is planning to raise an E80m to E110m private equity fund. Cape Natexis Private Equity Fund will focus on small to mid-cap buy-outs in the North of Italy, particularly in the Milan-Padua-Bologna triangle. Cape will target buy-outs and build-ups in situations relating to family accessions and consolidating sectors with enterprise value typically below E30m.
AltAssets 17.6.03

UK private equity firms lose faith in non-executive directors
UK private equity firms have little confidence in the ability of non-executive directors to supervise companies they have invested in, according to a survey by KPMG. This means that firms are being forced to spend more of their own time on company management. 75 per cent of the survey's respondents thought that at least one in three of the non-executive directors they have brought into their portfolio companies had failed to live up to expectations. As many as 30 per cent of the firms said half their non-executive appointees had proved ineffective.
eFinancial News 23.6.03

ABN Amro forms new private equity subsidiary
ABN Amro has formed a new subsidiary to make non-strategic private equity investments in financial services companies. The new entity will be called FI Equity Partners. FI Equity Partners will focus primarily on investment opportunities in Europe and Asia and expects to take significant stakes in companies with an investment horizon of between three and five years. The business will be based in Amsterdam and Hong Kong and will be headed by Arnold van Os. Van Os's previous responsibilities at ABN Amro include those as head of corporate development and head of financial institutions corporate finance for Europe.
AltAssets 9.6.03

UK Sigma Technology announces first close of £6m early-stage fund
Sigma Technology, the Edinburgh-based technology investment firm, has announced the first close of its latest early-stage fund. The firm has received £6m of commitments to date. The fund will invest in East of Scotland based technology start-up companies. Bank of Scotland has provided half the fund.
Venturedome 4.6.03

Standard Life says European buy-out activity healthy
Standard Life Private Equity Trust has announced a three per cent rise in the value of its European buy-out investments over the last six months. The company said investment activity had been healthy and that the pricing environment now looked historically attractive. The firm said the net asset value per ordinary share of its 31 private equity fund investments had risen 3.1 per cent to 93.1 pence in the six months to the end of March compared with the preceding period.
AltAssets 2.6.03

3i reaches E2.1bn first close on Eurofund IV
International private equity firm 3i has reached a first close of E2.1bn on its pan-European mid-market buy-out fund, Eurofund IV. 3i contributed E1.5bn of the total, with third party investors committing E400m and intending to invest a further E200m over the lifetime of the fund. 3i intends to invest in 15 to 20 mid-market buy-outs per year across Europe.
Real Deals 5.6.03

Swiss Capvis closes fund at E340m
Swiss mid-market buy-out firm, Capvis, has announced the final closing of Capvis Equity II at E340m. The fund exceeded its original target of E300m. Commitments were received from 19 institutional investors with approximately 72 per cent of the fund coming from European countries. Commitments were evenly distributed between public and corporate pension funds, financial institutions and funds of funds.
AltAssets 12.6.03

European fundraising down sharply in 2002 but long-term returns remain solid
The European private equity industry suffered a tough year for fundraising in 2002 but investment levels and long-term returns both remained solid. According to the official EVCA activity figures European private equity firms raised just E27.5bn last year compared with E40bn in 2001. But for the first time the UK, and not the US, was the principle provider of capital to Europe. Equally surprisingly France overtook the UK as the favourite destination for funds. The brightest element of EVCA's release was the revelation that investment in Europe in 2002 actually increased on the previous year to E27.6bn from E24.3bn in 2001. EVCA said the widespread sell-off of non-core corporate assets provided plenty of opportunity for private equity investment. 
AltAssets 4.6.03