Palley retires from BC Partners(3)

The 50-year-old executive is leaving the firm amicably after 17 years. He will continue to sit on the board of two portfolio companies, ensuring an orderly transition.

Simon Palley, one of BC Partners eight  managing partners, is leaving the European buyout group at the end of the month.
The firm has won plaudits for its management of succession issues in the past.

Simon Palley:

Michel Guillet, John Burgess and Alberto Tazartes, three of the firm’s managing partners in 2004 and 2005. This followed the retirement in 2001 of co-founders Otto van der Wyck and Patrice Hoppenot.  

Guillet, who founded BC’s Paris office in 1987, left in October 2004. London-based Burgess, a co-founder in 1986, and Milan-based Tazartes, who joined in 1989, departed at the end of 2005.

In 2005 the departures cleared the decks ahead of a then-record European fund which closed on €5.8 billion ($8.1 billion). A source close to the firm said this was not the case with Palley and his departure would not trigger a return to market. The current fund has still two to three years of investing to run before the firm needs to start fundraising.

Palley, who was closely associated with previous fundraising success, is retiring aged 50 after 17 years at the firm. The split, according to a spokesman for the firm, is amicable and Palley will remain on the board of two recently acquired portfolio companies: Swedish equipment maker Dometic and Greek casino chain Regency Entertainment.

The firm has always prided itself on the collegiate nature of its culture. All decisions require a unanimous vote by the managing partners.

Critics have suggested the firm’s performance has not been as strong as some of its European rivals Permira, CVC Capital Partners and Apax Partners. Performance data from the Washington State Investment Board’s most recent portfolio overview to the end of March, 2007, showed BC European Capital VII, BC’s 2000 fund, had a total value multiple, including distributions, of 1.68 times the original investment and an IRR of 19.5 percent.

By contrast Apax Partners’ Fifth fund, a 2001 vintage, has more than doubled in value with a multiple of 2.24 and an IRR of 43.2 percent. It is a more recent fund so its IRR is likely to be better.

BC Partners’ 1998 vintage fund is in better shape, showing a 2.64 value multiple and an IRR 23.7 percent, while its latest vehicle is under water with a IRR of -8.4 percent, although this is unlikely to be meaningful given its immaturity.

The two remaining managing partners in BC’s London office are Stefano Quadrio Curzio and Raymond Svider, who led the firm’s largest buyout with the $16.4 billion (€12.1 billion) acquisition of satellites operator Intelsat in June just before the debt markets seized.

Palley joined BC Partners from Bankers Trust where he spent two years originating and completing buyouts in Europe. He was earlier with Bain & Co in Boston and London for four years where he worked on a wide range of strategic assignments.
Before this he was with Chase Manhattan Bank providing banking services to international clients.