Private Equity
First came word from the Wall Street Journal earlier this month that New York buyout shop Vestar Capital Partners is beating a complete retreat from its European operations. And then yesterday the Financial Times reported that Fort Worth, Texas-based TPG Capital is rearranging priorities in Europe, placing less emphasis on buyouts and more on non-performing loans and restructuring. (Sources confirmed the main thrust of both stories to me; Vestar Capital, which has had offices in Europe since 1999, has decided to focus laser-like on the United States, its primary market over its last several funds. The withdrawal has been several years in the making.) You'd think buyout firms have had a hard time generating solid returns on their European investments. But, if so, that's not always been the case, judging from the results of five European funds in the returns database of sister magazine Buyouts. Managed by The Carlyle Group, Kohlberg, Kravis Roberts & Co., and Hicks, Muse, Tate & Furst, the five, running from vintage years 1998 to 2005, have generated a median investment multiple of 2x and a median internal rate of return of 21.5 percent. Perhaps tellingly, the worst performer to date is also the youngest--the 2005 KKR European Fund II, which is just slightly in the black according to backer Oregon Public Employees Retirement Fund. Click through below to see more details on the performance of this and the other four U.S.-sponsored European funds in our database.
2 min read · 14 November 2011
2 min read · 09 November 2011
So, let’s say you want to make more money. What do you do? Here's some advice: Head for the firms with the greatest assets under management. It's simple arithmetic. The more assets under management, the more a firm rings up in management fees and, in the case of buyout firms, deal-related fees (those not handed over to LPs). Bigger transactions also translate to bigger profits when it comes time to doling out carried interest. Firms managing more assets tend to have more mouths to feed, but rarely do firms ramp up their payrolls at the same pace they do their fund sizes. The disparities in compensation, as the infographics below show, are dramatic—and a source of ongoing angst for LPs, who worry that partners will be tempted to raise bigger funds than they can wisely invest.
2 min read · 03 November 2011
4 min read · 27 October 2011
Ronald Schmitz recently acknowledged to sister magazine Buyouts that the $900,000 in potential annual compensation offered by Virginia Retirement System factored in his decision to become its next chief investment officer this month. Schmitz had been CIO of Oregon Public Employees Retirement System since 2003. Schmitz joins a parade of investment officers that have stepped down this year from positions at retirement funds in California, Massachusetts, New Mexico and New York. Some, like Schmitz, are staying in the public sector. Others, like Raudline Etienne, former chief executive of the New York State Common Retirement Fund, are heading into the private sector, in her case to join consulting firm Albright Stonebridge Group. Just how big a role compensation plays in any individual departure is almost always impossible to say. Still, the latest edition of the 2011-2012 Holt-Thomson Reuters Private Equity and Venture Capital Compensation Report (North American edition) sheds light on what public pension funds are up against in competing with the private sector for talent--click through for infographic.
2 min read · 18 October 2011
4 min read · 10 October 2011
So, who earns more money, buyout professionals or venture capital professionals? The numbers are closer than you might think, based on an analysis of statistics presented in the just-published study, 2011-2012 Holt-Thomson Reuters Private Equity and Venture Capital Compensation Report, North American edition. Partners at the venture capital firms who participated in the study earned a median salary plus bonus of $445,000 in 2011; their counterparts at LBO/growth equity shops, by comparison, earned a fatter median salary plus bonus of $540,000. However, managing general partners at venture firms actually pulled in slightly more than their counterparts at LBO/growth equity firms in median salary plus bonus, $1.1 million to 1.0 million. Click through to see an infographic comparing compensation for these and six other common positions.</
3 min read · 04 October 2011
3 min read · 23 September 2011
3 min read · 09 September 2011
3 min read · 02 September 2011
