If reports are accurate, next year will see an unprecedented volume of capital being channelled into European private equity funds. While Apax Partners has, in the words of chief executive Martin Halusa, “pressed the button” on its latest €4.5 billion effort, it appears to be acting in isolation. The majority of Europe's premier LBO funds – many of which mooted 2004 launches – have opted to delay until 2005.
Cynics will say there's not enough money to go round, and it will all end in tears. But consider this: Europe's GPs are apparently so confident of their prospects that they are already recruiting furiously in anticipation of raising their funds successfully. The word from recruitment consultants is that demand for new hires is across the board: from twenty-something MBA graduates to wisened industry veterans.
One headhunter confided to PEI that a UK-based strategy consultant has suffered the separate departures of three members of staff to private equity firms in the last few months.
“I sense that the buyout market is picking up, and that people are more willing now to talk about recruitment than they have been for several years,” says Richard More, a private equity specialist at London-based executive search firm Cameron Moore. “Established private equity firms undoubtedly feel that if their track record is good, fundraising will not be too prolonged. Consequently, their attitude to recruitment is fairly bullish.”
In addition to optimistic fundraisers, recruitment professionals are also being kept busy by spinout operations seeking to bolster their ranks. A prime example of this was the UK's Hermes Private Equity, which recruited four professionals in the space of six months following the decision by parent company Hermes Pension Management to allocate £200 million to direct investments last year.
The likes of Exponent Private Equity and Balmoral Capital have ensured the continuation of the spinout trend in 2004, while Lazard recently added the fourth partner to its new pan-European buyout operation with the hire of Michele Russo from Doughty Hanson's Milan office.
Add to all this the latest whisper: the Americans are coming. Sources say a couple of buyout houses from the other side of the Atlantic are currently identifying suitable local talent for new operations. “That will keep things bubbling along nicely,” maintains the headhunting source.
RATOS NABS INVESTMENT MANAGER FROM RIVAL
Quoted Swedish private equity firm Ratos has poached Leif Johansson to be a senior investment manager from domestic rival Procuritas. Johansson joined Procuritas in 2001 to become an executive-in-residence and chief executive of ISAB 2, where he had responsibility for streamlining and divesting companies within the group. “Leif is one of the few people who has worked both as an operational CEO and who also has solid experience from active ownership and transactions,” said Ratos CEO Arne Karlsson. Ratos, which is listed on the Stockholm Stock Exchange, has equity holdings of approximately SEK 8 billion (€870 million; $1.1 billion).
PURCELL TO HEAD UP JPM EUROPE
Tim Purcell has been tasked with heading up JP Morgan Partners' European operation in addition to his current role as head of JPM in Latin America. Jonathan Meggs, currently in that role, will now focus on managing the group's existing portfolio, leaving the day-to-day running of the European operation to Purcell. Stephen Welton and Thomas Walker, the other two partners in Europe, will focus on sourcing new investments and executing deals.
DOUMAR QUITS GOLDMAN TO RAISE NEW FUND
Robin Doumar, the former head of European mezzanine finance at Goldman Sachs, has left the firm to set up his own fund. The new fund will reportedly be in the region of €1 billion ($1.2 billion), which would make it Europe's largest independent mezzanine fund. It is understood that Doumar will be joined by David Cottam, who recently left BNP Paribas, where he was head of international equity capital markets. Last September, Goldmans closed the largest-ever global mezzanine fund on $2.7 billion. In July this year, co-heads Geoff Clark and Elisabeth Varley Camp resigned from the bank's private equity group.
CSFB'S MARK NAHUM JOINS CARLYLE FUNDRAISERS
The fund placement specialist has joined The Carlyle Group in London, where he will work as a director in the firm's global fundraising team, reporting to fundraiser in chief David Rubenstein. Nahum joins from the Private Fund Group at Credit Suisse First Boston, where he worked since 1997. His arrival at Carlyle takes the headcount of the firm's in-house fundraising team to ten professionals. Since the firm's inception in 1987, the group has raised approximately $18 billion (€14.5 billion) in over 20 buyout, venture, real estate and energy funds. For CSFB's funds group, it is the second departure in as many months. In June, Mark Hallock, a managing director, quit to join independent rival Helix Associates.
JEFFERIES RELOCATES RESTRUCTURING CO-HEAD TO LONDON
Richard Nevins, co-head of the restructuring advisory team at US investment bank Jefferies International, has relocated to London to spearhead the firm's push into the European market. The new team currently comprises Nevins and two junior members but will be expanded in due course to take advantage of opportunities primarily in the UK, Germany, France and Italy. Nevins has been co-head of restructuring at Jefferies since 1998 and has 20 years' experience of the restructuring market. “With the rapid development of Europe's restructuring market, the decline of relationship lending, and the substantial, if belated, growth in Europe's high yield market, the opportunity is immense,” said Nevins.
POMONA BOOSTS LONDON OFFICE
The New York-headquartered private equity fund investment house has appointed Mark McDonald as investment associate in the firm's London office to focus on the sourcing of secondary opportunities and analysis of deals in-house. McDonald spent the last three years working for Venture Consult, an Anglo-Italian consultancy firm which provides investment and strategic advice and services to private equity firms in Europe. In March of this year, Pomona secured a $1.1 billion (€890 million) mandate to manage a portfolio of private equity assets on behalf of ING Investment Management Americas (IIM), almost doubling Pomona's assets under management to approximately $2.4 billion. The firm now has a team of 18 across its two offices.
BARTLAM BECOMES NEW CHAIRMAN OF PIP
Pantheon International Participations (PIP), the quoted fund of funds group, has appointed UK mezzanine provider Intermediate Capital Group's Tom Bartlam as its new chairman. PIP, which was the first private equity fund of funds group to be listed on the London Stock Exchange, has been managed by Pantheon Ventures since its establishment in 1987. Bartlam replaces former 3i chief executive Ewen Macpherson, who has stepped down from the chairmanship after suffering a bereavement. The firm's other board members are Pantheon founder and senior partner Rhoddy Swire, Richard Crowder, Peter Readman and Alexander Thomson. PIP operates a global private equity fund of funds programme based on strategic allocations recommended by Pantheon.
BARING VOSTOK APPOINTS
The Russian member of recently spun out group Baring Private Equity International has hired Sergey Abramov and Philippe Der Megreditchian. Abramov has been appointed to take responsibility for government relations and business development for the firm. A former journalist, Abramov has spent the last four years working for the Administration of the President of the Russian Federation. Der Megreditchian, who will be responsible for project management and business development, is the former chief executive of Eagle Venture Capital, a Moscow-based private equity firm that oversees four regional investment funds for the European Bank for Reconstruction and Development.
CINVEN BUILDS OUT IR TEAM
The European private equity provider has announced the appointment of Alexandra Hess to its investor relations team. Hess joins from New York-headquartered Oak Hill Capital Management, where she worked for five years, most recently as vice president for limited partner relations and fundraising. Hess will report directly into partner Andrew Joy as a member of a team now comprising three individuals. Cinven was established in 1977 and has offices in Frankfurt and Paris as well as London.
RUSSO QUITS DOUGHTY, JOINS LAZARD
The former head of Doughty Hanson's Italian operation has joined Lazard's fledgling European buyout operation. Michele Russo has left the pan- European private equity firm, where he had been a partner since 1998. Russo has become the fourth partner at Lazard European Private Equity Partners. At Lazard, Russo joins three other partners: Graham Keniston- Cooper, formerly of London-based buyout firm Cinven; Victor Vadeneaux, who joined from global investor Advent International; and Gilles Etrillard, the head of Fonds Partenaires Gestion, Lazard's existing French private equity business. At Doughty Hanson, Russo has been replaced by Alioscia Berto, who will head up a team of three at the firm's Milan head office.
FORMER HELIX PRO SETS UP FUNDRAISING SERVICE
Sarah Clarke, formerly of Helix Associates, the European placement agent, has left to set up her own private equity fundraising support service called Foundation Fundraising Services (FFS). FFS has been set up to provide assistance to GPs intending to raise money without the assistance of a placement agent and will offer services ranging from marketing and documentation presentation to advice on process-management. Said Clarke: “The aim of FFS is to equip its clients to present their stories compellingly with the minimum GP effort. This has already proved a popular combination.”
ADDLESHAWS RAINMAKER QUITS FOR DLA
UK corporate law firm Addleshaw Goddard has lost its respected head of private equity Darryl Cooke to rival firm DLA. Cooke will remain based in Manchester to head up DLA's regional private equity group outside London. Cooke was widely regarded as a pivotal figure in Addleshaws' private equity practice where he was head of a 12- partner, 22-lawyer private equity group that turned over an estimated £7 million (€10.5 million; $13 million) last year. Addleshaws' private equity team acts for a number of private equity houses including London-headquartered ECI Partners, mid-market private equity house Barclays Private Equity (BPE) and pan-European firm 3i. DLA is one of the UK's top ten law firms in terms of annual turnover, with a 20- partner strong private equity group.
COX TO HEAD UP BUSINESS ANGEL GROUP
UK-based Oxfordshire Investment Opportunity Network (OION) has appointed Jon Cox as its new head. Cox replaces Alastair Cavanagh who has been in the role for the last four years. Cavanagh has been promoted to Business Angels Network Co-ordinator. OION has raised £14.8 million (€21.9 million; $26.5 million) for 61 companies in the last four years. Cox joins the company from Fast Track, where he led a team of researchers that produces the annual Fast Track 100 league table. Cox said: “I look forward to building on OION's successful record which saw it raise £5 million last year for 18 companies based in locations across the UK.”