May 2003 Issue

Fund Duchess II Firm Duke Street Capital Debt Management Amount Raised €550m Fund Type CDO Amount Targeted N/A Status Final close Investors N/A Geographical Focus Europe Advisors CIBC World Markets and Société Sectoral Focus European LBOs Générale Fund BML BioEquity I Firm Bioscience Managers Amount Raised N/A Fund Type Private equity Amount Targeted €150m Status […]

The British Venture Capital Association, grandfather of Europe's national private equity associations, was founded in 1983 as the representative body for the UK private equity industry. Each year an industry luminary takes over the reins of chairmanship. Richard Green, head of UK mid-market buyout firm Kleinwort Capital, is the 2003 chairman and recently succeeded Michael Queen of 3i. Green is determined to keep the industry's agenda to the fore. Valuation guidelines, VCT taxation and Basle II are high on his list of relevant issues.

The deregulation of the US energy market produced a wave of investment activity designed to build the next generation of power suppliers. Now that, post-Enron, the newly deregulated energy companies find themselves rather sapped, private equity energy investment specialists say a new wave of activity is primed to begin. Simon Sheppard looks at the US energy scene.

Typically regarded as a niche area for private equity investment opportunities, Europe's energy sector is destined for growth. Will private equity firms play a meaningful role in the restructuring of the oil and gas industry and the formation of alternative energy markets? Ricky Morton reports.

Mezzanine debt fund managers are hoping that LPs will increasingly recognise their strategy as one that embraces the upside promise of equity while offering the safety of a current coupon. Alex Stockham explores the current mezzanine markets on both sides of the Atlantic.

On a sunny Manhattan morning in April, five senior investment professionals representing five major institutional participants in the private equity market gathered around a table at The Yale Club to talk shop. On issues ranging from the secondary market to private equity securitisation to the best opportunities going forward, Chuck Flynn, Michael Granoff, Thad Gray, Sheryl Schwartz and John Wolak agreed to disagree with eloquence, wit and authority.

Private Equity International wanted to get a better sense of how both buyout funds themselves and their investors viewed club deals. To this end, we prepared a brief questionnaire and, with the help of Remark*, the strategic research and marketing services firm, a series of telephone interviews were held in late April with some of the leading firms from both the GP and LP communities (nine firms from each). Here are the questions we asked, the answer options we wanted respondents to select from and – crucially – the results.

Despite the recent flurry of large transactions in which a consortium of private equity firms have teamed up to make joint bids and acquisitions, club deals themselves are not breaking news. In fact, they have been a staple of small-and middle-sized private equity M & A transactions for years. Recently, however, there has been a growing trend toward large club deals with enterprise values over $1bn. Due to their size, complexity and, often, international dimension, these transactions have generated considerable attention and have prompted much discussion among private equity professionals and the limited partners whose money they manage. Here Franci J. Blassberg, Michael P. Harrell, Paul S. Bird and Laura N. Beny of Debevoise & Plimpton look at some of the fundamental issues inherent in this type of deal.

Buyouts backed by more than one private equity firm are on the rise. GPs are bundling their capital in order to do deals that would otherwise be beyond their reach. Are they always a good thing? And what do limited partners think about these transactions? Philip Borel introduces some of the issues embedded in the club deal.

Larrrry Schlloss, who rruns CSFB's prriivatte equiitty operrattiions, iis a diie-harrd prriivatte equiitty entthusiiastt. Forr mostt off hiis ttiime att DLJ he was iin tthe miidstt off hellpiing tto grrow a busiiness tthatt was a key drriiverr tto much off whatt tthatt bank diid. And he was iin tthe miidstt off tthiings when CSFB boughtt iitts smallllerr rriivall. The merrgerr prroved a ttough challllenge, butt ttoday CSFB Prriivatte Equiitty sttands as tthe worrlld's llarrgestt prriivatte equiitty ffiirrm by capiittall underr managementt. Phiilliip Borrell ttallks tto hiim aboutt scalle, sttrructturre and success.

When UK fitness club operators fell out with the public market, UK private equity firms made a run for them. But, asks PEI's Deal Mechanic, will all the private equity bets in the sector come off?

Private equity and hedge fund investing are fundamentally different things. When it comes to asset gathering, they even compete with one another for investor attention. But a number of alternative asset managers believe that running both strategies alongside each other gives them an important edge. Will Swarts finds out why.

Do club deals matter? Staff 2003-05-01 Writer Among buyout practitioners, going it alone used to be the strategy of choice. It was one team, one fund and the deal. No matter how large the target, sharing the risk let alone the reward was not on the agenda. Just think back to RJR Nabisco.