Compass to liquidate portfolio

Following the departure of two of its founding partners last November, Compass Partners is looking to sell four remaining portfolio companies.

Compass Partners, the London-based private equity firm which lost two of its founding partners late last year, has confirmed plans to liquidate its remaining four portfolio companies. The firm also said it was considering a new fundraising campaign to launch in 2007.
According to a spokesperson, the firm’s 1997 debut fund, Compass European Equity Fund, is now fully invested. At $917 million (€720 million), the fund was the largest ever raised for European investment at the time. So far it has returned 75 percent of its capital to investors.
Of the nine investments made by the fund, four remain: Eco, a European manufacturer of coils and coolers for the heating, ventilation, air conditioning and refrigeration industry, bought in 2004 from BS, PM Partners and BNL Private Equity; Fläkt Woods, a Swiss fan maker formed in 2002 through the merger of Fläkt and Woods Air Movement; human resources business Drake Beam Morin, a 2004 purchase from the Thomson Corporation; and Elixia, the second largest fitness club operation in the Nordic region, and the second largest club owner in Germany.
Compass Partners aims to raise cash from the four remaining portfolio companies either through selling parts of the businesses or full disposals. At least one company is expected to be recapitalised. Bolt-on acquisitions are also planned for at least two of the companies, said the spokesperson.
If Compass Partners successfully realises its current investments, a new fundraising is likely to occur in the next twelve months, added the spokesperson, who did not provide further details.

Soldatos and Clark were not the first senior departures from Compass Partners. In 2002, three partners left the firm to set up mid-market private equity house Stirling Square Capital Partners, while operating partner Ken Hanna moved to Cadbury Schweppes, the confectionery and beverages group, in 2004 to become chief operating officer.

Compass Partners is now headed by remaining founding partner and chairman Stephen Waters, who also runs advisory business Compass Advisers, alongside partners Franklin Rudd and Allen Yurko.
News of Compass’s disposal plans was first reported by Financial News.