PEI Awards 2017: The EMEA winners

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Game-changer

Large-cap firm of the year in Europe

1. CVC Capital Partners
2. Advent International
3. Apax Partners

Was it ever in doubt? Well, maybe. Having been unseated in 2016 by EQT, CVC Capital Partners has returned, edging out rival Advent International, to claim the honours at the large end of the European market. Doubtless helped forward by its monstrous fundraise for Fund VII (see details in the Fundraise of the Year category), the firm also notched a series of smaller wins in the “business as usual category”. The firm deployed around €5 billion across 13 new investments, including the £3 billion take private of payments business Paysafe alongside Blackstone, the acquisition of Swiss luxury watchmaker Breitling for an undisclosed amount and a $703 million carve-out of women’s health products from Israeli pharma giant Teva. The firm also sold its majority stake in Ista, one of the world’s leading energy efficiency service companies, to Cheung Kong Property Holdings Limited.

Mid-market firm of the year in Europe

1. Equistone Partners Europe
2. Partners Group
3. IK Investment Partners

Firm of the Year in France in 2014, Firm of the Year in Germany in 2016, and now scooping the award in Europe in the mid-market category. Not surprising for Equistone Partners Europe – the firm made seven investments last year across France, Germany, the Netherlands, Switzerland and the UK and generated around €1.3 billion in proceeds across its exits. “2017 was another successful year for Equistone – one in which we continued to deploy capital across our target markets amid growing competition and to realise strong returns for our investors,” said Guillaume Jacqueau, managing partner and Paris office head. If its sale of French retailer Meilleurtaux is anything to go by (the deal was selected by readers as Exit of the Year in Europe), 2018 will be yet another successful year for the firm.

Limited partner of the year in Europe

1. APG Asset Management
2. Stonehage Fleming
3. ATP Private Equity Partners

Pension-owned APG Asset Management is an investment giant; the 700 staff at the organisation invest €469 billion of Dutch pension fund money. The investor launched its in-house private equity programme in 2013 and now has 23 investment professionals in two offices, with teams dedicated to primaries and co-investments.  In 2017 the team put €4.5 billion to work through funds and co-investments. It is a scale player – individual fund commitments can range up to €1 billion – and is regarded as one of the industry’s more sophisticated investors. GPs wanting to get APG on board need to know it is serious about ESG issues: APG asks partners to provide detailed ESG disclosure through a reporting framework it developed with other LPs. Its ESG head – Marta Jankovic (pictured) – is now also chair of industry body InvestEurope.

Deal of the year in Europe

1. Bain Capital Private Equity and Cinven for Stada
2. HgCapital and others for Visma
3. BC Partners and Pollen Street Capital for Shawbrook Bank

In what was Europe’s largest buyout in four years, Bain Capital Private Equity and Cinven partnered to acquire Stada, the listed German manufacturer of generic copies of drugs such as Viagra. The deal was “by no means straightforward”, according to Supraj Rajagopalan, a partner at Cinven who leads the healthcare and business services teams. The nail-biting contest hit several speedbumps, including counterbids from Permira and Advent International as well as not enough shareholders accepting the initial offer. Bain and Cinven eventually emerged victorious with Stada agreeing to the group’s €4.1 billion bid. If their 2017 activity is anything to go by – Bain was one of the top three largest deployers of private equity capital in Europe while Cinven sold stakes in at least six assets including Visma – 2018 may be an even bigger year for the buyout giants.

Exit of the year in Europe

1. Equistone Partners Europe for Meilleurtaux
2. Magnum Partners for Iberchem
3. Nordic Capital for Tokmanni

European M&A activity slipped last year by almost 20 percent with just over $1 trillion recorded across 8,188 deals, according to data from PitchBook. Declining volumes did little to thwart Equistone Partners Europe’s exit activity – the firm began its year with a splash with the February sale of French retail financial services broker Meilleurtaux to Goldman Sachs. Between acquiring the asset in 2013 to exit last year, Meilleurtaux’s revenues grew to €50 million from €16 million and upon exit the deal generated an 8.2x return and a whopping gross internal rate of return of 70 percent. The win in this category – Equistone’s first – no doubt contributed to readers also deeming the firm Mid-Market Firm of the Year in Europe, beating the likes of Partners Group and IK Investment Partners. With five other exits recorded last year, it’s clear Equistone is on a roll.

Fundraise of the year (EMEA) 

1. CVC Capital Partners
2. HgCapital
3. Waterland Private Equity Investments

CVC Capital Partners held a ‘one-and-done’ on the largest euro-denominated fund in private equity history in June 2017: the €16 billion CVC Capital Partners VII. And it could have raised that amount twice over. The fund officially launched in January with a €12.5 billion target. A month later the firm held two due diligence weeks – one at the Savoy Hotel in London and one at the Park Hyatt in New York – where its investment professionals from around the world gathered to answer investors’ questions. All in all, CVC held more than 1,500 LP meetings over the five-month fundraising, including those conducted during the two due diligence weeks. The fund received €30 billion-worth of interest from LPs despite offering no early-bird discount and lowering its hurdle rate to 6 percent. It also marked the last involvement for one of the firm’s long-time IR partners Mark St John (pictured), who will retire from the firm in 2018.

Secondaries deal of the year in Europe

1. AlpInvest Partners,
   Landmark Partners,
   Lazard for Investindustrial
2. Lexington Partners and Campbell Lutyens for BC Partners
3. Ardian, Campbell Lutyens for Mubadala

AlpInvest Partners and Landmark Partners were rewarded for their role in one of the more unusual secondaries deals of the year. It involved southern-Europe-focused Investindustrial raising a fund to buy €750 million of assets from its own 2008-vintage vehicle. Believing that there was still value in the fund the firm transferred six assets into the new vehicle, a move that effectively amounted to a 10-year extension on the original vehicle. It was partly a response to increased competition from sovereign wealth funds, who can leave assets to mature for longer. AlpInvest became the majority LP in the new fund, with Landmark also backing the process. The innovative structure was formulated by secondaries advisor Lazard.

Secondaries firm of the year in Europe

1. Ardian
2. HarbourVest Partners
3. AlpInvest Partners

Ardian continues to tower over the rest of the secondaries market. According to the SI 30, an annual survey published by sister publication Secondaries Investor, Ardian raised $31.6 billion in the five years leading up to August 2017, compared with $16.8 billion for second-placed Blackstone. Last year saw it participate in the largest stapled deal of all time – a $2.5 billion transaction involving sovereign wealth fund Mubadala – and set in motion the launch of an $8 billion mature secondaries fund for the second half of 2018. It was also very active on the sell-side, offloading $1 billion of pre-crisis stakes to CPPIB and around $1.5 billion of stakes to Strategic Partners across two transactions.

Secondaries advisor of the year in Europe

1. Campbell Lutyens
2. Credit Suisse
3. Lazard

Few have done as much to promote the use of GP-led transactions as Campbell Lutyens. While North America was big on volume, it was Europe that led the way on innovation, due in no small part to the secondaries advisor’s influence. In April, the firm worked on the largest-ever stapled secondaries transaction, a $2.5 billion deal involving Ardian’s 2015-vintage ASF VII fund and Abu Dhabi sovereign wealth fund Mubadala. Then in September, it managed a deal that saw BC Partners, one of Europe’s biggest private equity houses, run a process on its ninth fund and use a staple to help raise its €7 billion 10th fund, making it clear that GP-led processes are not just for those that are struggling. “We continue to see strong interest in the market in 2018, both in private equity and infrastructure opportunities, and we are focused on maintaining our flexible approach, working with both GPs and LPs across a wide range of mandates,” said partner Thomas Liaudet.

Firm of the year in Africa

1. Actis
2. Apis
3. AfricInvest

Africa is by no means a one-speed continent. Actis made strides in connecting its many diverse markets, cultures and languages with the launch of Africa’s first private higher education network in 2017. The firm built on two previous education acquisitions with deals for Moroccan engineering school Ecole Marocaine des Sciences de l’Ingénieur, as well as Management College of Southern Africa and REGENT Business School in South Africa. Honoris United Universities – which is led by chief executive Luis Lopez – spanned 27,000 students on 48 campuses, learning centres and online, in nine countries and 30 cities across Africa.

Firm of the year in Benelux

1. Waterland Private Equity Investments
2. Gilde Equity Management
3. Main Capital Partners

Buy-and-build specialist Waterland was in demand last year, raising €2 billion for its seventh vehicle less than two months after its launch.  “[Waterland] is the only GP in our portfolio where we have re-opted five times,” Torben Vangstrup, managing partner at ATP PEP, told Private Equity International after the close. “I have seen other buyout groups doing some buy-and-build work, but I have never seen it done as consistently and systematically as Waterland has been able to do over the years.”  Waterland’s commitment to the strategy is evident from its activity last year; it made a flurry of bolt-on and platform investments and opened a new UK office in February.

Firm of the year in CEE

1. Mid Europa Partners
2. Abris Capital Partners
3. Enterprise Investors

It is a good time to be the dominant force in CEE private equity. In a watershed moment from last year’s PEI awards, a Polish transaction – one led by Mid Europa Partners – was voted European Deal of the Year. It seemed like the appeal of the region may have finally imposed itself on the global stage. Mid Europa, which also took the CEE honours in last year’s awards, has picked up where it left off, inking a number of significant transactions and, PEI understands, started fundraising for its fifth fund seeking €800 million. Among the highlights from the firm’s year were its sale of Zabka, the leading convenience store chain in Poland, to CVC Capital Partners in what the firm described as the largest private equity exit ever in the region.  The firm is led by Robert Knorr and Matthew Strassberg.

Firm of the year in France

1. Apax Partners MidMarket
2. Equistone
3. Omnes Capital

Last year was a mix of old and new for Apax Partners MidMarket. The firm smashed its €750 million target to raise €1 billion for Fund IX, having secured 84 percent of its commitments from existing LPs in euro terms and 69 percent by number.  A number of previous investors also returned for the vehicle.  Apax later ventured into less familiar territory. It jumped into the small cap space with the acquisition of French private equity firm EPF Partners, which it renamed Apax Partners Development.  Another nod to the future was its appointment of Microsoft’s former head of MSN France, Gregory Salinger, as chief digital officer.

Firm of the year in Germany

1. Deutsche Beteiligungs
2. 3i Group
3. Equistone

It’s fair to say that private equity is currently a seller’s market. Few managers have provided better evidence of this than Deutsche Beteiligungs. The German firm completed five disposals within the space of only a few months last year, according to its 2016-17 annual report. Together these sales generated an average sale multiple of 3.8x; well above the long-term average. It’s no surprise the firm was hungry for more deals. Deutsche Beteiligungs invested around €63 million from its balance sheet alone in 2016-17, around two-thirds more than the average amount invested over the last five years.

Firm of the year in Iberia

1. Black Toro Capital
2. CVC Capital Partners
3. Magnum Partners

Black Toro Capital is a fitting name for the Spanish firm. A number of impressive deals last year suggest the special situations manager was more than a little bullish about its domestic market. Among the sweetest deals was a €40 million investment in ice-cream manufacturer Farga Group, owner of the Farggi ice cream brand. The transaction saw Farga acquire rival La Menorquina’s Iberian production unit and distribution network from its founder-owner, creating one of Europe’s biggest ice cream producers in the process. Other notable deals included Black Toro’s second investment into Seville-based fashion retailer Marypaz, which is among the largest in Spain, and an investment in biopharmaceutical company Bionaturis.

Firm of the year in Italy

1. Ambienta
2. Clessidra
3. Quadrivo

Environmentally friendly deals which generate attractive returns are the ultimate ‘win-win’ of private equity. Last year, Ambienta proved that responsible investing can go hand in hand on growth. The Milan-headquartered manager completed three primary acquisitions and sold Italian manufacturer IP Cleaning Group to Tennant Company for €330 million in April, having invested just €50 million three years prior. Ambienta’s ownership had seen IPC save 73,000 cubic meters of water and cut detergent usage by 2,200 tons in 2016 alone. “[This award] reinforces our core principle that the way to drive sustainable value is through investing in companies driven by environmental trends,” Nino Tronchetti Provera, founder and managing partner, said.

Firm of the year in MENA

1. Actis
2. Investcorp
3. Gulf Capital

Investors in North Africa and the Middle East have had to contend with a degree of political and economic upheaval in recent years. Actis appears to have taken these issues in its stride; a particular highlight was the 2.5x return it generated through an initial public offering of North African snack food business Edita. Such performance was all the more striking given that Actis had taken on the family business at the height of the Arab Spring. The firm was also active in Morocco. Honoris United Universities – a pan-African education network launched by Actis in 2017 – bolstered its North African presence with the acquisition of Ecole Marocaine des Sciences de l’Ingénieur, the country’s largest private education institution.

Firm of the year in the Nordics

1. EQT
2. Nordic Capital
3. HgCapital

The Nordic region is well-known for its less than temperate climate, but EQT showed no sign of feeling the chill in 2017. The Swedish firm started the year strong with a final close for its EQT Mid Market Europe fund at its €1.6 billion hard-cap in May. The same month was capped by its sale of business intelligence company Bureau van Dijk at a 3x multiple.  It would come to be a heated year of fundraising for EQT; the firm began marketing for Fund VIII in September and was said to be racing towards its €10.7 billion hard-cap in December. “They are having their arm bitten off,” said one member of the investment advisory community on the sidelines of a recent event in London.

Firm of the year in Switzerland

1. Partners Group
2. Capvis
3. Ace & Company

Partners Group is flying the flag for Swiss private equity on both the primary and secondaries side. As of June 2017 the firm has over €57 billion in assets under management, 17 percent of which comes from clients based in its home market. Last year saw it raise €3 billion for its Partners Group Direct Equity 2016 fund along with an additional €3 billion to go towards direct private equity investments. The fund will target the mid-market, along with select large-cap investments, and will follow its tried-and-tested strategy of identifying trends in a sector and picking the companies best placed to benefit from them.  The firm’s existing direct private equity portfolio has recorded compound annual revenue growth rates of 15 percent and EBITDA growth of 19 percent since 2014.

Firm of the year in the UK

1. Advent International
2. Livingbridge
3. Vitruvian

Advent International has enjoyed its most active year in the UK for over a decade. The firm completed three acquisitions in the UK, including the take-private of industrial maintenance distributor Brammer Limited in February. These were accompanied by two exits; most notably the sale of its final shares in global payments business WorldPay in February. “We have been active in the market for over 30 years and last year deployed a record amount of capital in a number of exciting UK-based international businesses,” James Brocklebank, managing partner, said.

Fund of funds manager of the year in Europe

1. HarbourVest Partners
2. LGT Capital Partners
3. AlpInvest

There is much more to being a successful fund of funds manager than just managing funds of funds. A look at HarbourVest Partners’ activity in 2017 gives a sense of the diversity of skills required to complement and enhance a firm’s ability to access the right funds when demand is through the roof. HarbourVest committed $821 million to European private equity funds in 2017, 70 percent of which were oversubscribed. Alongside this, the firm invested around $1 billion through 14 co-investments and $552 million into EMEA-focused secondaries transactions. While the firm is rooted in Boston – it celebrated its 35th anniversary in 2017 – its team in Europe, which is led by Pete Wilson, has been operating from London since 1990.

Placement agent of the year in Europe

1. Rede Partners
2. Campbell Lutyens
3. MVision Private Equity Advisers

Fundraising for private equity vehicles hit a decade-long high last year with at least $411 billion amassed in final closes. London-headquartered Rede Partners was the driving force behind many of the year’s headline fundraises in Europe, helping amass more than €12 billion of primary capital for 10 clients including Alchemy, FPE and Summa Equity. Rede was also behind HgCapital’s double fund close on more than £3 billion ($4.3 billion; €3.4 billion) and Apax France IX which raised €1 billion. Credit Suisse’s chief operating officer for EMEA M&A Mark Barbour-Smith joined as chief of staff. Rede takes its name from a word which means “to counsel or advise” and it’s clear “to lead” is also part of the firm’s DNA.

Law firm of the year in Europe (fund formation)

1. Debevoise & Plimpton
2. Goodwin
3. Simpson Thacher & Bartlett

One of the law firms in Europe spearheading the surge in fundraising towards pre-crisis highs is Debevoise & Plimpton. This is the first time the firm has won in this category in Europe, having clinched top place for fund formation in Asia in 2013 and North America in 2012.

Some of the firm’s highlights in the region last year include advising London-based Metric Capital Partners on the first and final close of its Fund III on its €850 million hard-cap, and the hire of King & Wood Mallesons’ co-head of funds team Simon Witney in January.

“Fundraising levels reached a high [since 2008] against a backdrop of ongoing regulatory change, both for funds and their investors,” said Geoffrey Kittredge, a partner who leads Debevoise’s fund formation group. “In that context, it is perhaps more important than ever for funds and their advisors to stay engaged with industry associations, regulators, and government bodies to help chart a forward path for private funds in Europe.”

Law firm of the year in Europe (transactions)

1. Clifford Chance
2. Latham & Watkins
3. Debevoise & Plimpton

With the exception of 2015 when King & Wood Mallesons usurped its stronghold on the title, Clifford Chance has won in this category every year since the PEI Awards began in 2001. The reason? It works with some of the biggest names in private equity and on some of the largest deals. In 2017 the law firm advised private equity clients on more than 40 deals representing a value of over £28 billion ($38.9 billion; €31.9 billion) and worked with stalwarts of the industry including Advent, Apax Partners, Blackstone, Carlyle, CD&R, Cinven, CVC Capital Partners, EQT, KKR, Partners Group and Permira, to name just a few.

With deals including CVC and Cinven’s acquisition of NewDay as well as Permira, Cinven and Mid Europa’s $3.3 billion purchase of Poland’s largest online marketplace Allegro as some of its headline transactions last year, Clifford Chance has much to boast about. Will they clinch the title again next year? A betting person would say yes.

Law firm of the year in Europe (secondaries)

1. Kirkland & Ellis
2. Clifford Chance
3. Macfarlanes

In September 2016 Kirkland promoted Ted Cardos to partner and charged him with leading the firm’s secondaries operation in Europe. The firm had won that year’s award for best secondaries law firm in Europe, so the pressure was on to keep up the good work. The numbers speak for themselves.  In 2017, Kirkland & Ellis advised on $963 million of European secondaries portfolio trades and more than €1 billion-worth of GP-led processes. Among the many deals it worked on was our European Secondaries Deal of the Year, the €750 million recapitalisation of Investindustrial’s 2008-vintage fund, which was backed by AlpInvest and Landmark. Kirkland has 250 dedicated investment funds lawyers, including 86 partners, across North America, Europe and Asia-Pacific.

Lender of the year in Europe

1. Ares Management
2. ICG
3. Alcentra

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Game-changer

A decade after launching its direct business in Europe on the eve of the financial crisis, Ares Management has completed more than 130 investments totalling more than €10 billion. On the heels of raising €2.5 billion for its third European direct lending fund, Ares Capital Europe III, in 2016, European direct lending was one of Ares’s most active investment strategies in 2017. It provided €330 million loan financing to Dutch gaming company JVH, which Waterland subsequently put up for sale in June.

In addition to Ares’ European direct lending team significantly increasing its assets under management, the strategy also recognised a gross asset level realised IRR of 10.3 percent since inception as of 30 September.