Europe

Europe
Buyside

Swiss investor club closes debut deals
Co-Investor, a privately held Swiss financial services company, has completed the first two investments funded by its private investor syndicate

The network offers its members, wealthy entrepreneurs in Switzerland and Germany, the chance to invest up to €2.5m over a period of three years, pooling member commitments to individual transactions in order to achieve an improved negotiating position and more attractive terms and conditions. Originally set up in 2000, Co-Investor acts as a trustee for and makes investments on behalf of its members. The company is also responsible for monitoring portfolio companies and planning and executing exits

The group is run by Andrés Ebhardt, a former vice president of Dresdner Kleinwort Wasserstein Private Equity. The founding shareholders of the firm include Hans-Dieter Cleven, CEO of Beisheim Holding and member of the supervisory board of Metro AG, Jürg Kallay, managing director of Beisheim Investment Group and Hans-Dieter Rompel, a pioneer of German biotech investment

“The business will operate along similar lines to firms such as [UK investors club] Braveheart,” said Ebhardt. “We aim to provide members with a regular flow of high quality deals. In contrast to traditional private equity funds, each member of the network has the option to decide whether to invest in a transaction and how much to commit to each investment.

The syndicate has 12 members already and is looking to take the total number of recruits in 2002 to 25. “We are primarily looking to attract entrepreneurs in Switzerland and Germany who have become disillusioned with the traditional fund of funds model,” said Ebhardt.

Global PE fundraising falls in 2001
The Global Private Equity Report, published by UK private equity firm 3i and PricewaterhouseCoopers, shows that there was a contraction in fundraising during 2001. Global fundraising in 2001 stood at $151bn, a 39 per cent fall on the $247bn raised in 2000. Despite a small decrease in its global percentage North America continues to lead the way in fundraising, generating just over $100bn of the overall total.

Worldwide private equity and venture capital investment also fell by about $99bn in 2001, reflecting the downturn in investment. $100bn was invested worldwide last year, equivalent to 0.32 per cent of the world's gross domestic product. The percentage invested in 2000 was 0.63 per cent.

The Asia Pacific region was arguably the best performer in 2001, maintaining investment levels at $11.9bn, down only three per cent on the amount invested in 2000. However fundraising in the region showed a considerable fall, down 32 per cent at $12.1bn. Western Europe accounted for 15 per cent, or $21.5bn of the overall total, a decrease of 33 per cent since 2000. However fundraising was less affected, down 22 per cent at $34bn.

Introducing the report, 3i chief executive Brian Larcombe said that on current projections, private equity and venture capital investments were likely to fall further by more than 30 per cent in 2002.

Larcombe added that his firm saw the current decline both in investment and fundraising as a ‘short term stumble’ rather than a shift in the value of private equity investment.

Nordic houses create €800m FoF
Finvest, the Finnish fund of funds manager listed on the Helsinki Stock Exchange, has reached agreement with its Scandinvian rival Sampo to merge the two firm's fund of funds operations under one company structure.

Finvest will acquire €19m of Sampo's private equity fund investments, of which €6m is still to be drawn down. In return Sampo will receive a 49 per cent stake, making it the biggest shareholder in the enlarged group. The combined business, which will be renamed Amanda Capital, has funds under management totalling €800m.

“The strategy for Finvest has always been to try to grow the company,” commented Topi Piela, who becomes the managing director of Amanda Capital. “Not only does this deal double our number of investments but it adds diversity to our range of investments.” Finvest currently has investments in eight general partnerships and had planned to make two further investments prior to the announcement of the merger.

According to Piela, the deal will also enable the business to cut management fees. The current fee of 1.25 per cent will be reduced on a sliding scale to between 0.5 and one per cent. The merger also means that a co-operation agreement between Finvest and LGT Capital Partners, the Liechtenstein alternative asset manager, has been terminated.

Europe
Deals & Exits

Private equity investors drop Bundesdruckerei
Apax Partners, one of Europe's leading private equity fund managers, has transferred its interests in Authentos, the Berlin-based holding company that controls Bundesdruckerei, to JFVVG Neununddreissigste Vermögensverwaltung in Berlin and Dinos Vermögensverwaltung in Munich. The two asset managers now own 94 and six per cent of the group respectively.

Apax, alongside a group of investors including Allianz Capital Partners, JP Morgan Chase and a number of co-investing limited partners in Apax funds, acquired the state-owned Bundesdruckerei in November 2000 in a E1bn privatisation. At the time, Bundesdruckerei was considered a hugely attractive investment opportunity, with close to 80 bidders participating in a highly competitive auction. Apax became the largest investor in the group holding more than 50 per cent of the shares.

Authentos ran into financial difficulty when Orga, its chipcard maker, was hit by adverse market conditions in the telecommunications industry this year. Earlier this month it took a bailout agreement struck with Landesbank Hessen-Thüringen and the German government to avoid insolvency.

Newspaper reports suggest that Apax had written off over £120m from the Bundesdruckerei investment although the company declined to comment.

West Private Equity moves into healthcare
West Private Equity has become the latest UK mid-market firm to move into the healthcare sector with the management-backed acquisition of Southern Cross, the UK's third-largest residential care provider.

The UK firm has teamed up with Southern Cross management to acquire the business from private owners for approximately £45m plus a refinancing of £35m of debt financing. The equity component of the deal totalled £33m with the remaining £51m being provided as debt from Royal Bank of Scotland and Barclays.

Philip Buscombe, West Private Equity CEO, attributes the growing interest in the sector to a number of factors, not least the growing call for high quality care. “In addition to the changing demographic, there is a growing aspiration for quality elderly healthcare. The quality operators are likely to increase market share as the sector evolves.”

The deal takes the total value of healthcare-related private equity investment in the past three months to just below the £1bn mark. 3i and Doughty Hanson have between them completed deals of around £500m since May, whilst HgCapital, Barclays Private Equity and Sovereign Capital are among an active group of mid-market players.

Nordic Capital buys fitness assets
Nordic Capital has backed the management buyout of the Nordic operations of 24 Hour Fitness Worldwide, which operates health and fitness centres in Denmark, Norway and Sweden. Nordic Capital will take an 84 per cent stake in the business, which comprises S.A.T.S Sports Club in Sweden, S.A.T.S in Norway and Form & Fitness in Denmark. Financial terms for the transaction have not been disclosed. Nordic is buying the business from 24 Hour Fitness Worldwide, the second-largest fitness club operator in the US which is currently in the process of disposing of its European assets.

Nordic Capital partner Anders Hultin said the firm had a strong brand in the region. “We see the business as an interesting IPO candidate with high profitability and good growth opportunities.”

DSC continues drinks buy-and-build
Marie Brizard, the French wine and spirits producer majority-owned by Duke Street Capital, has acquired French specialist winemaker Les Chais Beaucairois in a €23m transaction.

Duke Street, which has a 68 per cent stake in the €200m turnover business, has funded the acquisition of Les Chais Beaucairois, which operates the largest wine bottling plant in France. The company employs 250 people on a site in Beaucaire, near Nîmes and reported turnover in 2001 of €154m.

Duke Street managing director Frédéric Chauffier said the acquisition marked a ‘significant step forward’ in the firm's strategy for Marie Brizard. “Our aim for this business has always been for it to become a significant player in the European drinks market.” Duke Street Capital acquired its stake in Marie Brizard in March 2000, paying approximately €54m in a deal that included the assumption of €100m debt.

CVC buys more in Spain
CVC Capital Partners has continued its recent spate of acquisitions in the Spanish market with the purchase of loss-making Spanish supermarket chain El Arbol from Dutch retailer Laurus. The Spanish chain has suffered a sharp downturn in performance over the past three years, reporting losses in excess of €120m and a ten per cent drop in turnover.

The pricing details of the transaction have not been disclosed, although Laurus confirmed that it will provide a €24m euro secured loan to El Arbol as well as a €30m long-term, unsecured loan. The London-based firm launched in Spain in 1997, and to date has invested in excess of €1.5bn in Spain, including the recent €577m purchase of power assets from Iberdrola.

Duke Street drives fitness consolidation
European private equity firm Duke Street Capital has furthered its participation in the UK health and fitness sector with the acquisition of sports club operator Invicta Leisure.

The UK business, which operates 15 sports and fitness clubs across the UK, is being acquired from RIT Capital Partners, Electra Investment Trust and management for a total consideration of £140m. Invicta founder Kevin McCollum and Esporta finance director Michael Ball will form the basis of the management team of the enlarged business, which will trade under the Esporta brand.

Duke Street acquired Esporta in July following protracted negotiations with the Esporta board. Esporta, which operates primarily in the UK but also owns clubs in Spain and Sweden, finally succumbed to a 87.5 pence per share offer, valuing the firm at £145m.

The enlarged Esporta Group comprises 18 racquets clubs and 42 health & fitness clubs, with a further 13 scheduled to open before the end of 2003. The group had 260,000 members at 30 June 2002, making it the UK's second largest premium health, fitness and racquet club operator.

Banexi buys French biotech business
Banexi Capital Partenaires, the fund management subsidiary of BNP Paribas, has backed the management buyout at Progiven SAS, a manufacturer of industrial biocides based in Montdidier, France.

Progiven, which reported turnover last year of around €25m, is a subsidiary of French chemicals vendor Lambert Rivière Group, which in turn is part of Dutch group Univar. The consideration for the transaction was not disclosed, but continues Banexi's strategy of investing in businesses with earnings of between €20m to €250m. The investment was made from the firm's Middle Market Fund 2.

Exit routes still open for Bridgepoint
ABN AMRO Capital, the European private equity arm of ABN AMRO Bank, has completed the secondary acquisition of UK camera and photographic accessories business Jessops from Bridgepoint Capital in a £116m transaction. This marks the tenth exit for Bridgepoint Capital this year, following earlier exits from Eurogestion, the French pest control and hygiene services company it acquired in November 1999, to ISS, the quoted Danish support services group, in a deal totalling €155m.

Bridgepoint completed the original management buy-in of Jessops in 1996. At the time the company had a valuation of £42m. The number of stores operated by Jessops in the UK in the last five years has more than tripled to 236. In the past three years the company has increased sales by 94 per cent to £242m.

Bridgepoint originally planned to exit the business through a stock market listing. On two occasions, in October 2000 and earlier this year, the firm shelved plans for a listing due to adverse market conditions. At the time of the first IPO announcement, Jessops was valued at £95m. Bridgepoint Capital director Raoul Hughes described the deal as ‘highly successful’.

Jessops will be jointly owned by management and funds managed by ABN AMRO Capital. HSBC, Jessops' bankers, have arranged and underwritten the acquisition and working capital facilities.

Strong exit for 21 Invest
21 Invest, the private equity firm which specialises in Southern Europe, has completed the sale of half of its holding in Servicepoint Solutions, a Spanish reprographics business.

21 Invest disposed of 4m shares in the firm, which at the time of 21 Invest's original investment was a small Spanish office products business called Grupo Picking Pack, for a total consideration of €38m. This represents an IRR of 55 per cent on the firm's total investment of €31m since it first backed the firm in 1994. The value of 21 Invest's remaining interest in Servicepoint is just below €38m.

The partial exit from Servicepoint, which specialises in reprographics for architects, engineers and the construction sector, comes as 21 Invest is concentrating on investing its most recent fund, the €323m 21 Invest LP fund launched in 2000. The fund will focus on industrial investments primarily in Italy and Spain.

Europe
Funds

Access raises €27701 for second FoF
Access Capital Partners, the French-based fund of funds manager, has held a final close of its second European fund of funds, Access Capital Fund II.

At the time of its launch in January 2001, the firm had targeted a final close of between €300m and €400m for the fund, which has two compartments focusing on technology and buyout funds respectively. The fund held a first close at €200m in June 2001, but subsequent events and a major downturn in confidence in the technology sector made the original target less attainable.

The buyout section secured €154m in commitments, but the technology section fell short of its target raising €123m. “The amount raised is lower than we had originally hoped for, but given the change in the market during the last eighteen months, we are pleased that we have raised sufficient capital to pursue our initial investment strategy,” commented Access Capital partner Philippe Poggioli.

The fund, which will specifically target mid-market buyout funds and European technology venture capital funds, has already made commitments to three European buyout funds and four technology funds, including the ACT 2001 VC Fund in Ireland.

The fund has attracted predominantly European institutional investors, although a number of US and Middle East investors have also participated.

AP Fond 6 launches tech fund
Swedish pension fund AP Fond 6 has teamed up with Skandia Life to launch an early-stage fund targeting Scandinavian businesses that currently lack funding due to the decline of the technology sector. The new fund, Creandum, will have up to SKr350m (€36m) for seed investments in technology businesses that display a ‘potential global reach’. Creandum will look for innovative ideas that can be patented, preferably for applications that can be commercialised in growth markets around the world.

The initial funding will be provided by AP Fond 6 and Skandia although it is possible that further investors in Creandum will be sought at a later date. AP Fond 6 and Skandia Life hope to provide around SKr100m each to the fund, with the remainder coming from third party institutions including one international fund.

Leman Capital fundraising on track
Swiss private equity house Leman Capital has held a first closing of its second buyout at €150m, raising the funds entirely from previous investors in the US and Canada.

Commitments to date have come solely from previous investors in the firm's €155m BVP Europe I fund, which targeted buyout opportunities in countries neighbouring Switzerland. The new fund is targeting a €400m to €500m final close, with an extended remit that includes possible investments in Italy, Spain and Benelux.

Leman Capital director Rod Egli said that the firm would now be targeting investors in Europe and that it was currently in the process of selecting a placement agent. “The plan is to raise the bulk of the capital for the fund in Europe. We have already had a number of unsolicited approaches from European investors.” Egli added that BVP Europe I, which was raised four years ago, is fully invested and has a non-realised IRR in excess of 30 per cent.

HealthCap IV oversubscribed
HealthCap IV, the healthcare venture capital fund which targets investments across the US and Europe, has closed on SEK3bn (€330m).

The fund, the first raised by Swedish parent Odlander Fredrikson Group to seek commitments from international investors, was ‘heavily oversubscribed’ by a list of top-ranking investors, including Grove Street (for CalPERS), HarbourVest Partners, Allianz Private Equity, Swiss Re and the Fourth Swedish National Pension Fund.

HealthCap IV will invest in the commercialisation of medical science and innovations in the medical sector. The fund is targeting investments across all stages in the Nordic region, Western Europe and the US. Over half of the funds capital will be set aside for European investment. The fund has already made four investments, split between early and late-stage businesses.

MVision Private Equity Advisors acted as global financial advisors to Odlander Fredrikson, with CSFB and Handelsbanken as regional placement agents.

SVIIT to launch new FoF
Schroder Ventures International Investment Trust Plc (SVIIT) has said it is planning new product launches, following the announcement of robust preliminary trading results for the full year ended 30 June 2002.

The London-based group said net asset value per share had increased by 1.5 per cent to 413.7p -against an NAV of 407.6p the previous year – or £423.1m in net assets. SVIIT's compound growth of NAV per share was an annual 16.9 per cent over the past five years.

Nick Ferguson, chief executive, attributed the ‘resilient’ performance to the conservatism with which portfolio companies were being run. “Earnings and balance sheets have improved almost entirely across the portfolio, and very tight cost controls have helped companies to perform well in their sectors.”

During the past year, SVITT acquired affiliated entities Schroder Ventures (London) and Schroder Ventures North America and, in conjunction with Schroders Plc, raised a €242m fund of funds from institutional and high net worth private investors.

A follow-on fund of funds is to be launched later this year, again with Schroders Plc as a joint venture partner.

HBM launches second biotech fund
HBM Bioventures, the later-stage biotechnology investor based in Baar, Switzerland, has launched its second biotechnology private equity fund.

HBM Bioventures II is seeking to raise up to €200m for its second fund, which unlike the first will focus solely on private equity investments. Fund I divided its investments between public and private companies, specialising in biotechnology, emerging pharmaceutical, medical technology and related industries.

The new fund is expected to primarily make direct investments in the US and Western Europe. HBM is still investing its first fund of SFr750 (€500m) which it raised in 2001. Investors in the first fund included Swiss private bank Julius Baer & Co.

A spokesperson for HBM said that the fund was scheduled to hold a first close before the end of 2002.

Merlin benefits from biotech optimism
Merlin Biosciences, the UK-based venture capital investor specialising in biotechnology and life science investments, has held a first closing of its latest fund at €125m.

Merlin Biosciences Fund III, which will invest in biotechnology companies across Europe, has secured €93m of funding from previous investors including a €30m investment from WestLB, a cornerstone investor in the fund. Westport Private Equity and the European Investment Fund, which contributed €25m are also repeat investors. New investors to the fund include Japanese investors NIF Ventures and Marubeni.

Sir Christopher Evans, founder and chairman of Merlin Biosciences, said he was impressed by the level of support for the fund. “In a tightening market, Merlin is well-placed to capitalise on the value opportunities that are present in the European market.” The new fund will invest between €10m to €18m per investee company.

The firm is targeting a final closing in 2003, and with biotechnology still one of the more resilient venture sectors amid the current downturn, is confident of achieving its €250m target.

Siparex acquires French fund manager
Sigefi Ventures Gestion, the controlling business of Siparex Group's venture capital management, has taken a majority stake in Sud-Partners, the Lyon-based company that manages Sudinnova and its Sudinnova II fund, which invests in French technology and life science investments.

Siparex has bought the firm from its current owner, Banque de Lyonnaise, which acquired the firm in 2001. The fund Sudinnova II has €33m in capital commitments. Under the terms of the agreement, Sud-Partners will continue to manage the fund Sudinnova II.

Rodania raises first Spanish wireless fund
Grupo Rodania, the Spanish venture capital firm set up in 2000 with backing from Swedish venture capital firm Ledstiernan, is in the process of raising its first fund targeting wireless investments in Spain.

The firm is seeking to raise €45m as it looks to exploit a gap in the market for investment in early growth stage firms specialising in mobile applications and services. The fund has already secured a cornerstone investment of €15m from the European Investment Fund.

“We think the timing for the fund is perfect, in part due to the current reduced valuations and to the fact that Spain has very few industry-focused early stage investment funds,” says Svante Borjesson, founding partner of Rodanio.

Europe
People

Bowley leaves Pantheon
Leading fund of funds manager and gatekeeper Pantheon Ventures has parted company with Richard Bowley, its London-based chief executive officer and a member of the buyout team that acquired the firm from GT Management in 1988. Bowley first joined Pantheon in 1986.

As a member of the firm's international investment committee, Bowley was responsible for business strategy and co-ordinating operations in Europe, Asia, the Americas and Africa. Alongside Rhoddy Swire, the group's founder and chairman, and Carol Kennedy, chief strategist and research officer, he was among the firm's most senior executives. A successor has not been announced yet.

Clients have been told the parting of ways took place amicably, prompted by Bowley's desire for a change of lifestyle and a new professional challenge after 16 years with the firm. The 42 year old is understood to be selling part of his equity interest in the management company back to Pantheon, whilst remaining a significant minority shareholder.

With over $5bn under management, Pantheon is one of the leading fund of funds operators and investment consultants in the world, with relationships to over 500 general partnerships.

Allianz adds to private equity team
Allianz Private Equity Partners, the private equity funds and co-investment division of German insurer Allianz, has hired Marc Thiery to the firm's private equity operations in Munich.

Thiery, who joins Allianz Private Equity Partners as a managing director, will be responsible for the Group's investment activities in Europe including primary investments in venture capital and buyout funds, as well as secondary and co-investment transactions.

Thiery joins Allianz PEP from Morgan Stanley Capital Partners, a $3.3bn buyout and development capital fund. Based in London, he had primary responsibility for the German private equity investment activities of MSCP from 1997-2002. He started his career at Apax, where he worked primarily on German transactions for the UK firm.

The appointment is the first to be announced following the decision by Allianz earlier this year to bring the firm's diverse private equity operations under one roof following the acquisition of Dresdner Bank last year. Allianz confirmed at the time that Thomas Puetter, currently chief of Allianz Capital Partners, would head up the new Allianz Private Equity Holding business. The firm's private equity investment team is headed by Wanching Ang, with Helmut Wimmer leading the primary fund investments team.

CDC Ixis hires three in Paris
CDC Ixis Equity Capital, the leveraged buyout division of CDC Ixis Private Equity, has made three appointments at the firm's operations in Paris.

The firm has hired former Pricoa Capital executive Antonio Graça. Graça, who worked in the transaction services department at PwC prior to joining Pricoa, becomes an investment director. Also joining the firm as investment director is Fabrice Georget, who joins the firm from the corporate finance division of Arthur Andersen where his responsibilities included involvement in business turnarounds and advice on a number of M&A transactions.

The third appointment is of company solicitor Sophie Teissèdre. Teissèdre specialised in the field of M&A and real estate and has been a lawyer with Lefevre, Pelletier & Associés since 2001.

The firm is currently investing from CDC Entreprises II a €450m target fund that was launched last year to invest in medium and large LBOs in the French markets. The new appointments will enable the firm to increase the fund's activity in the

French LBO market, which could be set for a sharp increase in activity following disposal announcements from France Telecom and Vivendi Universal as well as a possible privatisation p rogramme by the French government which looks set to proceed with disposals of some of its stakes in businesses including Air France, Renault, France Telecom and Credit Lyonnais.

Benchmark names fourth London GP
Benchmark Capital, the US venture capital firm focusing on high-tech investments, has made Mark Evans the fourth general partner at the firm's European headquarters in London.

Prior to joining Benchmark, Mark was CEO of a Benchmark portfolio company, BridgeSpan, a software and services provider to financial institutions. Previously he spent fifteen years at Goldman Sachs, where he was a management committee member, and held senior management positions in Europe, Asia and the US.

Benchmark was one of a number of venture capital firms that announced reductions in its fund size earlier this year. In May the firm cut back its European fund to $500m, freeing investors from $250m of commitments. At the time,

European partner Eric Archambeau said he was confident of achieving the same number of deals and that it was ‘possible to get 40 per cent of a company in today's market for less than you used to pay for ten per cent’.

3i changes European management
3i has announced that Chris Rowlands is to join the firm as a member of the 3i executive committee with responsibility for the UK network outside of London, as well as 3i's business in Germany, Switzerland, Austria and the Nordic region. Rowlands will also be responsible for Growth Capital across Europe.

Rowlands joins the firm from Arthur Andersen, where he helped to develop the firm's corporate finance business, becoming a member of its UK leadership team.

Brian Larcombe, 3i chief executive, said the appointment was part of a process that would give the firm a more integrated approach to its European network, allowing the firm to benefit from its broad network of offices across the continent.

In another change of responsibilities, Paul Waller will take on responsibility for 3i's network in Holland, France, Italy and Spain, adding to his current responsibilities for unquoted fund management.

The firm also announced the appointment of former Suez vice president Christine Morin-Postel, who joins the firm as non-executive director.