Europe

Europe 2003-10-01 Staff Writer <strong>Europe<br> <bold>Monitor</bold></strong><br> <sec level="2"><strong>Knowledge upgrade</strong><br> <quotation><bold>Do pension fund trustees and investment consultants know enough about private e

Europe
Monitor

Knowledge upgrade
Do pension fund trustees and investment consultants know enough about private equity to give informed investment advice to their constituents? Many in the industry, and not just general partners, think not.

In the soupy world of who is responsible for what in private equity, it's still most likely that you'll think first of the general partners: those guys who invest OPM (Other Peoples' Money). The mainstream as well as the financial media help ensure this, with news stories still scattered all over that are spiced with allegations of distorted IRRs and truculent GPs.

But it's about time that some of the other less familiar – or better perhaps less ubiquitous – parts of the recipe get properly acknowledged too. Hence, let's not just talk about limited partners, lets talk about the particular groups that can make up an LP. For a pension fund, this usually means that you will have investment staff managing the investment process, consultants providing advice and trustees who as a board are meant to ensure the fund delivers what it is meant to.

We have been talking about pension fund trustees to a number of industry practitioners recently and, notwithstanding the particular agendas of each, it has become clear that the respect that trustees typically enjoy is often negatively correlated with the influence they wield. That is not to suggest that industry practitioners don't regard trustees as important: one of the world's largest fund of fund managers will readily explain to you why trustees are key to private equity's evolution. It's just that these groups of individuals are seen as poorly equipped to engage with the asset class and as a result their influence can be easily resented. More tellingly, it is argued that the funds they supervise are prone to an innate conservatism and herd-like mentality that guarantees average (at best) performance.

Have a flick through the Myners Review that was commissioned by the UK government in an attempt to shed more light on how pension funds work and how they might change and you find evidence why private equity professionals feel that trustees don't understand them. In a survey of 266 trustees of 122 funds it was found that 69 per cent had two days or less training for the role of fund trustee; 62 per cent of trustees had no professional qualifications in finance or investment; and 49 per cent spent three hours or less preparing for pension fund meetings.

Prudent men
At issue here is the fact that the UK requires pension fund trustees to act as “prudent men” and “to conduct the business of the trust with the same care as an ordinary man of business” (this from the Goode Report of 1993). Admittedly this was given a little bit more edge in the Trustee Act of 2000 that said a trustee must have regard to “any special knowledge or experience that it is reasonable to expect of a person acting in the course of that kind of business or profession”. This takes the prototypical UK trustee nearer to the US equivalent – where the Department of Labor Federal Regulations stipulate that a trustee must be “a prudent man acting in a like capacity and familiar with such matters in the conduct of an enterprise of a like character and with like aims.” But whereas in the US one can cast a trustee as a prudent expert, you are still left thinking that there are far too many amateur trustees in the UK (and elsewhere in Europe too).

Which brings us to the investment consultant. Surely the trustees can look to the consultants to provide the expert knowledge they lack? There seem to be two reasons to question this: one is that a very small number of consulting firms dominate the market (it is estimated that four such firms hold 85 per cent of the UK advisory business) and this surely inhibits the breadth and depth of thinking that is provided. Another is that the consulting firms themselves have recently been having a torrid time in the media as disgruntled funds (trustees included) have complained of inadequate advice following the public markets' decline. That, say some, suggests that the consultants' expert advice should be acted on with caution.

Finally: as pension funds struggle to service ballooning commitments to their pensioners, isn't it time that all parties within the buyside upgrade their knowledge and investment procedures when it comes to alternatives? If participation in the asset class is to generate real benefits, there seems to be no way around that.

Knowledge upgrade” was first published on www.PrivateEquityOnline.com.

Europe
Deals & Exits

Eurazeo, Carlyle link for Terreal deal
French private equity investor Eurazeo and The Carlyle Group, the US private equity firm, have announced a partnership set up to fund a €515m buyout of Terreal, the French tiles and bricks manufacturer, from parent company Saint Gobain.

Carlyle beat off competition from a number of financial buyers including PAI Partners, CVC Capital Partners and Bain Capital. Eurazeo was eliminated from the bidding in the first round and joined the Carlyle bidding group at a later stage of the auction. “We know Eurazeo very well. We've worked with them in previous transactions and we're comfortable with the people there,” said Carlyle partner Benoit Colas.

Carlyle and Eurazeo have agreed to pay €400m for the equity of Terreal and will assume debt totalling approximately €115m, giving the deal a total value of €515m. Debt financing for the transaction will be provided by ING.

Consortium tops Debenhams offer
Following its earlier acceptance of a 425 pence per share offer from a consortium of Permira, Goldman Sachs and Blackstone, the board of UK retailer chain Debenhams has accepted an improved offer from a rival consortium of private equity firms. CVC Capital Partners, Texas Pacific and Merrill Lynch Global Private Equity have offered 455 pence per share for the UK department store, valuing the business at £1.66bn (€2.37bn). The offer is pitched at a 7.1 per cent premium to Permira's offer.

The new consortium brings together John Lovering, who was linked with an offer for UK supermarket chain Somerfield earlier this year, and Rob Templeman, chairman of UK auto equipment retailer Halfords acquired by CVC in 2002. Chris Woodhouse, deputy chairman of Halfords, also joins the bidding team.

Texas Pacific and CVC each hold a 41 per cent stake in Baroness Retail, the acquisition vehicle set up to acquire Debenhams, with Merrill Lynch holding a 16.67 per cent stake. Debt facilities have been arranged and underwritten by Morgan Stanley and Credit Suisse First Boston.

Permira said in a statement that it was “considering its position” following the improved offer.

Doughty sells FL Selenia for €670m
London-based private equity firm Doughty Hanson has agreed to sell Italian automotive fluid company FL Selenia to New York-based Vestar Capital Partners for €670m.

Doughty Hanson acquired the company in April 2000 from Italian motor company Fiat. The exit represents a 2.4 times return on the firm's investment and an IRR of 30 per cent for the firm's third fund.

“We are delighted to have agreed to this transaction, which is one of the most significant private equity exits in Italy for a number of years,” Michele Russo, a partner in Doughty Hanson's Milan office, said. “We are confident that FL Selenia will continue to prosper under its new ownership.”

3i backs French consultancy MBO
3i, the UK-based private equity firm, has backed a €50m management buyout of ‘S'il vous plait’ (SVP), a telephone consultancy business based in France. SVP provides consultancy services to 6,500 French clients including local government, accountancy and law firms on issues such as HR law, tax and cultural affairs. The business was set up in 1935 and currently employs 200 people.

“SVP represents just the sort of company in which we are keen to invest in France,” said Richard Campin, who heads 3i's buyout business in France. “It has a unique market position, good growth prospects and a very strong management team.”

The business reported revenue last year of €44m and EBIT of over ten per cent. SVP is headed by CEO Henri Gagnaire who joined the firm two years ago and has also backed the buyout. Funding for the buyout was provided by 3i and managed funds. The debt syndicate was led by HSBC- CCF and BNP.

Bridgepoint takes Robinia majority stake
Bridgepoint Capital, the UK mid-market private equity firm, has led a £50m investment in Robinia, a provider of care services for people with learning difficulties in a deal that sees Bridgepoint take a majority stake in the business.

The Robinia management team, led by CEO Elizabeth Wagstaff, has invested £4.6m to take a “significant” minority stake in the company. The business had previously been funded exclusively with a debt and mezzanine package from Bank of Scotland. Bank of Scotland has provided acquisition debt for the latest transaction, as well as providing development capital for the company's future growth.

Set up in 1995, Robinia operates a portfolio of 51 homes with a total of 426 beds located across the Midlands and the South of England. Robinia provides residential and nursing care services for residents with learning disabilities.

Advent backs Polish insulation buyout
Advent International has financed the buyout of Bolix, Poland's second-largest manufacturer of insulation systems for the construction industry.

Financial terms of the transaction have not been disclosed, although a source close to the transaction put the price at around $40m.

Advent International has teamed up with Dariusz Kociolek, formerly CEO of international insulation group Dryvit's Polish subsidiary, who will take over as CEO of Bolix.

The firm has also recruited Marek Drewniak as CFO, who joins from Schoeller, an international textile business.

Advent bids for Spanish leisure group
Parques Reunidos, Spain's largest theme park operator, is the subject of a €6.10 per share public to private offer from Advent International, the US private equity firm. In a statement to the Madrid Stock Exchange, Parques

Reunidos confirmed that it had received an offer from Global Private Equity IV, the $1.9bn fund closed by Advent in January 2002, and had given the firm access to the company's financial information. The €6.10 per share offer values the business at €147m. Prior to the announcement, the company's shares were trading at €5.55 per share.

CapMan buys €100m cosmetics business
CapMan, the Finnish private equity and venture capital investor, has backed a management buyout at Noiro, the cosmetics and detergent business unit of Orion Corporation, a Finnish healthcare group. The deal is worth approximately €100m, making it one of the largest investments ever made my CapMan. The final price will be agreed in October, when the transaction is expected to close.

Noiro produces cosmetics, personal hygiene and hair-dressing products as well as institutional cleaning products with own brands accounting for over 80 per cent of net sales.

According to Orvo Siimestö, senior advisor at CapMan in Finland, Noiro will seek to expand its operations in the Nordic countries, Russia, the Baltic countries and Poland. “Noiro's strong market position in Finland and its promising international growth opportunities make it an attractive company. Strong brands like Lumene, skilful personnel and steadily growing sales and profits constitute a firm basis for the further development of the company,” he said.

Warburg Pincus buys Russian radio group
Warburg Pincus, the global private equity investor, has taken a controlling interest in Radio 7, Kanal Melodia and Eldoradio, a group of three Russian radio stations with dominant positions in the Moscow and St Petersburg markets.

The businesses have been acquired from US firm Adamant Advisory Services via a new company set up by Warburg Pincus, RBMH Broadcast Media Holdings. The financial terms of the transaction have not been disclosed.

“These stations hold established positions in the two largest radio markets in the country, enjoy a loyal base of listeners and advertisers, and possess capable and experienced management teams,” said Joseph Schull, a Warburg Pincus managing director based in London. “The Russian radio advertising market has grown strongly in recent years and we look for continued healthy growth in the coming years.”

Warburg Pincus confirmed in September that it was planning to move into the Russian market. Schull said the firm would look to invest in businesses in sectors ranging from retail to financial services, investing between $20m and $50m per company.

Carlyle Real Estate in UK debut
Carlyle Real Estate Partners, the real estate unit of the US private equity firm established in 2001, has completed its first UK acquisition, paying £67m to AXA Sun Life for the leasehold of 107 Cheapside, a property situated in London.

The investment is the first to be made in the UK from Carlyle Europe Real Estate Fund, the firm's Europe-dedicated opportunistic property investment fund which has so far raised €350m and is thought to be targeting a final close of €500m at the end of the year. The fund will invest in mid-sized properties in the office, industrial and retail sectors.

To date, the Carlyle Europe Real Estate Partners fund has invested in 14 transactions in France, Germany and Italy.

Europe
Funds & Buyside

Study: private equity gets mixed review
Institutional investors find they are getting a good deal out of their alternative investments, according to a report published by JP Morgan Fleming Asset Management. The report, which solicited the view of 171 UK investors and a total of 341 institutional investors across the UK and Europe, found that 66 per cent of those invested in private equity believed the asset class had met or exceeded their expectations.

However, private equity was also the asset class that met with the greatest disapproval rating, with 34 per cent saying they felt returns had not met expectations. Just under half of those surveyed said they wanted to increase their allocation to private equity.

Overall, the level of investment in private equity and hedge funds remains low, the report found. JP Morgan Fleming said the average level of assets allocated to private equity among those with an allocation to the asset class was currently 3.3 per cent.

Gartmore to build private equity unit
UK fund manager Gartmore Investment Management is planning to launch a private equity arm in October with approximately £600m ($953m) initially under management. “We have undertaken a strategic review of the investment market and have concluded that a major growth opportunity exists within the private equity business,” Mark Robertshaw, chief financial officer at Gartmore said. “We are planning to launch our offering to clients in the early part of 2004 as we already have a number of parties who have indicated that they are interested in working with us on private equity products.”

The group's initial capital will come from current private equity investments, and the new firm will be headed by Gartmore veteran Peter Gale, who has been with the firm since its earlier incarnation as County Bank.

As part of the launch of the private equity business, Gartmore has hired Nick Shaw as deputy managing director. Shaw spent 17 years at Shell, becoming deputy chief investment officer for Shell Pension Management Services in 1997, which has over £11bn of assets under management. He was also responsible for the management of their £520m private equity programme, which he established in 1993.

Ex-Fininvest chief raises €1.2bn Italy fund
Former Fininvest chief executive officer Claudio Sposito is organising a €1.2bn buy-out fund to focus on Italian companies. Sposito resigned as CEO of Italian prime minister Silvio Berlusconi's family holding company, Fininvest, in May in order to set up his own private equity firm called Clessidra. Sposito was Morgan Stanley's head of investment banking in Italy before joining the Berlusconi family to head Fininvest. The family office controls some of Italy's largest companies including Mediaest, the largest commercial broadcaster, and Mondadori, a major publisher.

Clessidra is gathering capital from Italian institutional investors, but is also trying to build up an international investor base. The firm is understood to have already collected more than €500m from Italian investors.

Astorg launches €300m Fund III
Astorg Partners, the French private equity firm headed by Xavier Moreno, has held a first close of its third mid-market buyout fund. Astorg III has secured commitments totalling €110m at the first close, with Adams Street Partners, Axa Investment Managers or Morley Fund Management among the investors. The fund has a final close target of €300m, scheduled for the end of March 2004. Global Private Equity, a Paris-based placement specialist, is acting as placement agent for the fundraising.

Partners Group launches secondaries fund
Partners Group, the Zug-headquartered alternative asset manager, is planning to raise a €400m fund to acquire privately negotiated interests in existing private equity partnerships from sellers worldwide. Fundraising is already under way and a €100m first close is scheduled for October.

According to a source close to the firm, Partners Group Secondary LP will focus on “manager secondary” investments in private equity partnerships that are typically less than 70 per cent invested and which are between two and five years old. “The firm is hoping to attract existing and new investors to the fund,” the source said. “They are also hoping to attract new entrants to the secondaries market who like the growth opportunity.”

Golding, VCM to launch mezz fund of funds
Golding Capital Partners and VCM Venture Capital Management, two private equity fund of funds specialists based in Munich, have set up a joint venture to raise €100m from institutional investors for VCM Golding Mezzanine, Europe's first dedicated mezzanine fund of funds.

The fund, which according to VCM managing director Thomas Schwartz is aiming for a first close near €50m by the end of the year, will make between 10 and 15 investments in mezzanine investment funds operating both in the US and Europe. It aims to generate an internal rate of return of approximately ten per cent.

Standard Life holds €892111 third close
Standard Life Investments, the private equity fund unit of the UK-based mutual insurer, has held a third close of European Strategic Partners II (ESP II), a European fund of funds. ESP II has closed a further €153m from investors in North America, Scandinavia and the UK, taking the total volume of commitments to €892m.

Standard Life Assurance has provided a cornerstone €500m investment to ESP II. “Investor confidence in our private equity team is very encouraging and I hope we can continue progress towards our €1bn target for ESP II,” said Jonny Maxwell, chief executive of Standard Life Investments (Private Equity).

Evergreen closes $140111 Fund IV
Israeli venture capital firm Evergreen Partners has closed its fourth fund on $140m, the lower end of the fund's $140m to $170m target. 99 per cent of the fund's capital came from outside Israel, including commitments of $25m from HarbourVest Partners and the

Illinois Teachers Retirement System. Other investors are the Ontario Municipal Retirement Fund, Bank of America, California Institute of Technology, NIF Ventures and Nippon Ventures.

Deutsche Beteiligungs closes at €228111
Deutsche Beteiligungs, the listed German private equity firm, has closed DBAG Fund IV, the first fund raised by the firm to seek commitments from institutions that do not hold shares in the firm. DBAG IV will make investments of between €10m to €60m in industrial Mittelstand companies with turnover of between €50m to €500m that are based in German-speaking countries.

The fund, which had an original target of €250m, fell short of this figure, raising a total of €228m. Deutsche Beteiligungs spokesperson Wilken von Hodenberg said the firm was pleased with the outcome.

“The fact that experienced investors have entrusted €228m to us in this currently difficult environment is a mark of distinction for Deutsche Beteiligungs AG and its investment team,” said von Hodenberg.

Doughy at €8oom first close
Doughty Hanson has held a first close of its fourth European buyout fund, securing commitments totalling €800m. Doughty Hanson IV will invest in middle market and large-sized European businesses with an enterprise value above €250m. The firm is planning to raise €3bn for the fund and to hold a final close next summer.

According to a statement, limited partners in new fund include Partners Group, Pantheon Ventures, West Midlands Pension Fund, State of Michigan and Verizon Investment Management. European investors comprise 45 per cent of current commitments, US investors 30 per cent and Asian investors a total of 25 per cent.

Copernicus launches first Polish fund of funds
Polish private equity firm Copernicus Capital Partners announced the launch of the country's first fund of funds, seeking to raise between PLN300m and PLN600m ($77m and $153m), according to the firm. Financing will come primarily from institutional investors in Poland, in particular Polish pension funds, the firm said. However, Polish pension funds face legislative restrictions on the amount of money they can invest in private equity.

The fund will operate in the Central and Eastern European region, though it will target primarily established, medium-sized private equity buyout funds with assets under management between €30m and €100m.

Currently, Polish pension funds are limited to invest no more than five per cent of assets in a closed-end investment fund. But most private equity funds are registered outside of Poland and therefore inaccessible to Polish pension funds. The framework could change as soon as this year now that the Polish parliament is working on a new Investment Funds Act that would ease some of the restrictions.

Private equity funds in the Central and Eastern European region currently have €4.8bn in assets under management, according to EVCA. The Polish private equity market, which has 40 funds, is 46 per cent expansion stage investments, 29 per cent replacement capital, and 17 per cent buyouts.

Sitka healthcare VCT to raise £i2m
The Sitka Health fund VCT, the only UK venture capital trust specialising in the healthcare sector, has returned to the market for fresh capital, having launched a 'C share offer of £12m.

Established in 2001, The Sitka Health fund VCT raised £8m in previous fundraisings. As at the end of September, it has completed 11 investments including in the last six months BioVex, a cancer therapeutics company, Amura, an anti-infective therapeutics business and Eyebright, a chain of cataract and optical day surgery centres.

Sitka, which is based in London and led by Gerard Tardy and Louis Nisbet, said in a statement it was confident that the investment climate for companies in the healthcare and life sciences sector was attractive and would remain so for the foreseeable future.

The offer is sponsored by Williams de Broe.

Europe
People

Nordic Capital makes Dyvig partner
Nordic Capital, the private equity firm headquartered in Stockholm, has hired former Morgan Stanley managing director Christian Dyvig as a partner.

Danish national Dyvig will be based at the firm's Copenhagen office and will be responsible for coordinating the firm's Danish activities. He joins Nordic Capital after more than ten years in the mergers and acquisitions team at Morgan Stanley where he headed up the bank's Nordic and most recently the German activities. Dyvig also spent five years at Danish law firm Kromann Reumert.

“Dyvig's long, successful international banking career and his Danish network will give us an even better position from which to grow our business,” said Robert Andreen, managing director of Nordic Capital.

MTI hires life sciences manager
MTI Partners, the UK-based hi-tech venture capital firm, has hired David Holbrook as an investment manager. Prior to joining MTI, Holbrook was executive director of Onyvax, a developer of therapeutic cancer vaccines. He has also served as chief executive of Imperial College Company Maker, following posts with both Glaxo and Roche, the pharmaceuticals groups.

Paul Castle, founder and CEO of MTI, said the firm had previously made a relatively small number of investments in the life sciences sector. “As we look forward to raising our fifth venture capital fund, we expect to materially increase our activity in the life sciences arena, to complement our established positions in the IT and materials technology areas.”

Ostmeier to run new Blackstone office
New York-based private equity house The Blackstone Group is setting up an office in Hamburg, Germany, with the appointment of Hanns Ostmeier as senior managing director.

Prior to joining Blackstone, Ostmeier spent seven years at European private equity firm BC Partners, leaving in December 2002 as a managing director of their German advisory office in Hamburg. He also spent several years with Boston Consulting Group as manager of their Düsseldorf office.

Ostmeier will serve as senior advisor and head of Blackstone's Hamburg office, the firm's first beyond its current two offices in New York and London. He will focus on investments in German-speaking and Northern European markets.

IK executive follows Mix to Altor
Stefan Linder, a Stockholm-based director of Industri Kapital, has resigned from the European private equity firm to join Nordic rival Altor Equity Partners, which is run by IK co-founder Harald Mix.

Most recently, Linder had been working alongside Christian Salamon, who heads up IK's Swedish operations. Prior to that, he had responsibility for IK's Finland coverage.

A spokesperson for Altor confirmed that Linder was joining the firm, adding that he was not likely to take up a position until next year.

Foulds joins Duke Street in Paris
European buyout firm Duke Street Capital has expanded its French operations with the appointment of Mark Foulds, a former director of Bridgepoint Capital in Paris where he spent seven years focusing on mid-market buyout transactions. The appointment increases the number of professionals at the firm's Paris office to six. The Duke Street team is headed by managing director Frédéric Chauffier. “Duke Street has known Foulds for a long time and we are looking forward to working together with him,” said Chauffier. “His extensive experience and contacts will strengthen Duke Street's position in the French market.”

De Rosiére joins Acanthus
Acanthus Advisers, the independent placement agent based in London, has hired Laurent de Rosière to work with the firm's founder, Armando D'Amico, on sourcing fundraising mandates.

De Rosière joins from RVC Europe, the venture capital fund spun out of Reuters in September 2001, where for the last two years he was director of marketing, business development and investor relations. Previously, he worked with Reuters in London, and in Munich as head of the Reuters Greenhouse Fund German office.

Gresham builds regional presence
Gresham Private Equity, the UK mid-market private equity firm which gained independence from parent-company Zurich Financial Services in February, has hired Paul Franks as an investment manager at its Birmingham offices. Franks joins the firm from PricewaterhouseCoopers' Birmingham office where he was assistant director of the firm's corporate finance unit, specialising in transaction origination, marketing, structuring and execution of deals in the middle market. He was seconded to private equity group Bridgepoint Capital throughout 2002.

Advent grows in London, Warsaw
US private equity firm Advent International has made three appointments at its European offices in London and Warsaw.

In London, the firm has hired former JP Morgan partner Georg Stratenwerth as a partner. Stratenwerth began his career in consulting, first with Mercer Management Consulting and then with Roland Berger Strategy Consultants. In 1993, he joined JP Morgan Partners working in London and New York, before moving to Munich where he became partner responsible for investment activities in Germany. A spokesperson for Advent said Stratenwerth would work closely with Ralph Nuep's German team based in Frankfurt.

In Poland, Advent has hired Khai Tan to head the firm's Warsaw office. Tan began his career with ING Group, working in Brazil and the Philippines and, for six years, in Warsaw where he established and developed ING's corporate banking and capital markets activities. Also in Poland, Katarzyna Biezychudek joins the firm's Warsaw office as an associate. Biezychudek joins Advent from CSFB where she was a member of the bank's global industrial and services group, working on debt and capital market transactions.

Additions and changes at Electra Partners
Electra Partners Europe, the European private equity firm, has made two appointments at its London office. Maria Groen joins the firm as a director responsible for marketing and business development. Until late 2002, Groen was based at Bridgepoint Capital. Prior to this she worked at Merrill Lynch Asset Management.

Johannes Meran joins the firm after two years at Goldman Sachs in Frankfurt. Before joining the US investment bank, Meran worked at the German strategy consultancy Roland Berger & Partners.

Electra has also announced that two new investors have joined the firm's Electra European Fund following Abbey National's decision to withdraw from the asset class. HarbourVest International Private Equity Partners IV and the Third Swedish National Pension Fund (AP3) have taken over Abbey National's commitment in the Electra European Fund. Financial details of the transfer were not disclosed.

Hermes builds out direct investment team
Hermes Private Equity (HPE), the private equity arm of Hermes Pensions Management, has recruited former CVC Capital Partners investment director Justin Ward as a director. Ward spent seven years at the UK buyout firm, having spent several years as a chartered accountant at Arthur Andersen working in London and Paris in the firm's tax and corporate finance team. While at CVC, Ward worked on mid-market and large UK and European buyouts.

Ward becomes the third recruit to join the firm over the summer following the appointment of Gillian Brown as a director of its funds team, whilst Shane Feeney has joined its direct investment team as an investment director.

Delta Capital names new CEO
Delta Capital, the Russian investment fund launched by the US government, has appointed Pat Cloherty as the firm's new chief executive officer. She replaces Dave Jones, who held the position since 1998. Cloherty has served on the board of the US Russia Investment Fund since 1995 and has been its chairman since 1998. She is a former co-chairman, president and general partner of Apax Partners (formerly Patricof & Co) in the US.

Delta is thought to be close to announcing a close of its first private equity fund targeting private investors. The Delta Russia Fund LP is looking to raise around $100m.

Bank of Scotland hires in Germany
Bank of Scotland has made a series of appointments at its German leveraged finance team as it continues to build its continental European operations.

Of the three appointments announced, the most senior is Heinrich Kerstien, who joins the firm as a director. Prior to joining the bank's Frankfurt-based leveraged finance team, Kerstien was part of the leveraged finance team at Deutsche Bank for six years, where he was involved in financing large leveraged buyouts.

The firm has also hired Dominik Spanier, who joins from the London office of Royal Bank Private Equity, and Thomas Grau, recruited from ING BHF-Bank in Frankfurt. Spanier joins the bank as an associate director and Grau as a senior analyst.

Bridgepoint hires former Carlyle director
Bridgepoint Capital, the mid-market European private equity firm, has hired former Carlyle director John Davison as a director at the firm's offices in London.

Davison was previously a director of The Carlyle Group in London until 1998 where he worked on a range of investments in the media, telecommunications and industrial sectors. Prior to that he was at McKinsey & Co and Booz Allen & Hamilton.

“[Davison's] broad range of private equity and operational experience is very relevant to how we implement the right strategies to create the long term growth in value we look for when we invest in companies,” said Bridgepoint managing partner William Jackson, commenting on the appointment.