Succession planning is a big deal in private equity. A firm's clients care immensely about which individuals look after the capital they entrust with them. Most partnerships are dominated by a small number of key decision-makers, and when these decision-makers decide to exit the partnership, limited partners need to know that existing investments will continue to be managed properly, and that new capital will be invested with the same acumen as before. Handling the succession process well is complicated, and private equity firms are not known to be particularly good at it.
European LBO specialists BC Partners appear determined to be an exception to this rule. Investors have been notified that Michel Guillet, John Burgess and Alberto Tazartes, three of the firm's managing partners, are to retire within the next 18 months. This follows on from the retirement in 2001 of cofounders Otto van der Wyck and Patrice Hoppenot.
According to LPs, Guillet, who founded BC's Paris office in 1987, will leave the firm in October this year. London-based Burgess, a co-founder in 1986, and Milan-based Tazartes, who joined in 1989, will depart at the end of 2005.
The changes come ahead of BC's eagerly anticipated return to the fundraising market later this year or next year to raise its eighth LBO fund. Existing limited partners say the retirees will not be involved in investing BC European Capital VIII, although all three are expected to personally invest in the new fund.
BC's LPs also say they feel positive about the firm's handling of the pending management changes. Commented one: “They've told us about these developments early, and they've got the depth and breadth of talent to replace the three internally and to ensure management continuity.”
BC Partners currently has 10 managing partners, including Stefano Quadrio Curzio and Raymond Svider who were elected last year, and 12 partners across offices in London, Paris, Hamburg, Geneva and Milan. The managing partners meet every two weeks to make decisions on key issues relating to the firm's business on a one partner, one vote basis.
After the departure of Guillet, Burgess and Tazartes, Hamburg-based managing partner Jens Reidel will chair the managing partner meetings as well as the firm's investment committee. Simon Palley, who sits in London, will lead the communication of BC's performance and strategy to investors. Francesco Loredan, who heads up the Geneva office, will oversee the administration of the firm and its funds.
NOVA GROWS PORTFOLIO MANAGEMENT TEAM
Patrick Austen, former executive director of CRBFL Investment Trust, has joined Nova Capital Management, the UK-based private equity portfolio management firm. Austen has operational experience in a variety of industries, specialising in turnarounds and corporate restructuring. Before joining CRBFL in 1996, he was chief executive of Liberty Plc, a London-based retailer and textile manufacturer. In February, Nova made two senior hires to add venture capital capabilities to its existing buyout-focused business, recruiting Olav Ostin and David Tate.
NEW OPERATING PARTNER AT DUKE STREET
David Williams, who was most recently chief executive at UK alcoholic beverage retailer Threshers Group, has become an operating partner at Duke Street Capital with responsibility for consumer-facing investments. Prior to joining Threshers in 2001, Williams was chairman of listed bar chain Slug & Lettuce, where he oversaw the firm's strategic review and sale. He had previously spent five years as head of Burger King in Europe and the Middle East and also had senior roles at Pizza Hut International and Pepsico Restaurants International.
PARKES STRENGTHENS LEHMAN REAL ESTATE GROUP
Gerald Parkes will join the European Real Estate Private Equity Group of Lehman Brothers as managing director and head of the group in September. Mark Newman, currently a managing director with Lehman, has been appointed to the newly created position of chief investment officer (CIO) to oversee the investment and disposition process for Lehman Brothers' global real estate private equity investment activities. Parkes moves from Invesco Real Estate, where he was chief executive of the European real estate management and advisory business. He and Newman will report directly into Raymond Mikulich and Mark Walsh, global heads of Real Estate Private Equity.
THIERY HIRE LAUNCHES ENGLEFIELD EUROPEAN PUSH
Marc Thiery, formerly of Allianz Private Equity Partners and Morgan Stanley Capital Partners, has joined Englefield Capital Partners, the European mid-market investment firm. For Englefield, Thiery's appointment marks the end of a period of intense recruitment activity aimed at building a pan-European investment team. Founding partner Dominic Shorthouse said the firm, which since inception has completed four transactions in the UK, was now ready to make investments in markets across Europe.
KPMG UNVEILS POACHED DELOITTE LBO TEAM…
The London-based private equity group at financial services firm KPMG has poached a team of 16 LBO professionals including four partners from rival Deloitte. Rustom Kharegat, Helen Pratten, Robert Ohrenstein and John Oldcorn have joined the group as partners, with Kharegat acting as global head of large leveraged buyouts. At Deloitte, Kharegat had been in charge of UK and European private equity transaction services.
…WHILE DELOITTE GROWS UK PLACEMENT TEAM
Alma Poskovic has left independent fund placement operator Atlantic- Pacific Capital to work with James Coleman at Deloitte's recently established private equity fund placement unit. At Atlantic-Pacific, Poskovic helped organise private equity partnerships on behalf of MatlinPatterson, Platinum Equity Partners and Deutsche Beteiligungs amongst others. At Deloitte, Poskovic will be working as a manager alongside Coleman, who joined the firm last year from UBS. Including hires from within the firm, Deloitte now has five professionals dedicated to fund placement.
VESTAR SHORES UP EUROPEAN OPERATIONS
The New York headquartered private equity firm has appointed Mario Cesari as an executive director in its six-strong Paris office. Cesari joins the firm as executive director from US private equity firm Berkshire Partners. He was previously a management consultant with McKinsey & Co in France and Switzerland. In a statement, Cesari said: “I have been impressed with Vestar's unique approach to entering the European private equity market, building local teams in key continental markets.” Since mid-2002, Vestar has completed four acquisitions in Europe.