The standard for proprietary deal flow has just been raised in the rough-and-tumble private equity secondary market.
Solidifying its presence in London, secondary specialist Paul Capital Partners last month named Elaine Small a managing director there. Small is charged with developing the firm's secondary-deal sourcing network throughout Europe and the Middle East.
What makes Paul Capital's new recruit unusual is Small's background – she joins the firm after a stint as an executive search professional at headhunting group SpencerStuart & Associates. Small focused on recruiting senior-level executives across the financial services industry, including at banks, insurance companies and private equity firms.
Small's coziness with senior banking and insurance professionals was of particular interest to New York-based Paul Capital – consolidation in both industries has led to the lion's share of large secondary deals. “Having prior knowledge of senior management is a big leg up,” says a secondary market participant.
As a former investment banker at Bankers Trust, First Boston and JP Morgan, and as an executive recruiter for private equity firms, Small is also very familiar with private equity people, which helps when the time comes to perform due diligence on a GP group's portfolio in advance of a secondary transaction.
As the secondary market has matured, intermediaries have burgeoned, keen to stand between buyer and seller. This has led firms like Paul Capital to focus more intently on circumventing these middle men. Small's appointment represents original thinking on what constitutes a suitable background for the rapidly changing private equity secondary market.
CHANGING OF THE GUARD AT PPM
The private equity arm of UK insurance company Prudential has appointed 39-year-old Neil MacDougall to succeed Jonathan Morgan as managing director of the firm.
MacDougall joined PPM Ventures in 1989 and became a director in 1995. Most recently, he was responsible for co-ordinating the firm's investment strategy in the chemical and healthcare sectors. Jonathan Morgan will take up a number of non-executive directorships of PPM portfolio companies, including TMF Group and Suspa Holding. He will also remain chairman of the Australian investment committee until the firm's fourth Australian fund, an AUD$180 million (€103 million; $125 million) partnership, is fully invested. Morgan joined Prudential in 1985, became a director of PPM in 1989 and took the helm in 1995. Under his tenure as managing director, the firm opened offices in Paris and Munich in 1999 and 2001 respectively. Together with PPM America Capital Partners, PPM Ventures jointly controls approximately $4 billion (€3.3 billion) in committed capital across the globe. In June this year, the firms jointly acquired Sterigenics, the ionisation business of Belgium's Ion Beam Applications for $331.5 million. In January, PPM Ventures acquired the diagnostics business of US-headquartered pharmaceutical corporation Pfizer for $575 million.
MORGAN STANLEY PRO JOINS PROVIDENCE IN LONDON
Following the Metalmark spinout, Gustavo Schwed has joined Providence Equity Partners media investment effort in London. Schwed joins the Providence, Rhode Island-based firm from Morgan Stanley Capital Partners, where he was a partner responsible for European private equity. Before joining the private equity division in 2000, Schwed was chairman of Morgan Stanley's global emerging markets unit based in Sao Paulo, Brazil. He formerly was a partner at Brazilian private equity firm Bassini Playfair & Associates and, from 1984 to 1995, worked at the private equity unit of Donaldson, Lufkin & Jenrette. Providence, led by chief executive officer Jonathan Nelson, has been involved in some of the media world's biggest buyouts. In May, the firm joined The Blackstone Group in purchasing California's Freedom Communications, the publisher of The Orange County Register, for a reported amount of between $1.5 billion (€1.25 billion) and $2 billion (€1.67 billion). The firm has raised $4.25 billion for its latest fund, according to market sources (see story p.26)
LOVELLS BOOSTS FRENCH PRIVATE EQUITY TEAM
The London-headquartered law firm has appointed Monique Sentilles-Dupont to its Paris office. With over 25 years experience as a lawyer focused on private equity and transactional work, Sentilles- Dupont joins from independent French law firm Nomos, which she helped found in 1998. Sentilles-Dupont will work alongside partners Alexis Terray and Jon Harry. Lovells' current team in the French capital comprises 19 partners.
GREENPARK HIRES PERMIRA PRO
The London-based private equity secondary investor has recruited Christophe Nicolas from European buyout heavyweight Permira. Nicolas, a French national, becomes an investment director at Greenpark. At Permira, he was involved in transaction origination and execution in the media, leisure and business services sectors. Notably, he worked on the June 2003 €5.65 billion buyout of SEAT Pagine Gialle, the Italian directories business, in which Permira invested alongside BC Partners, CVC Capital Partners and Investitori Associati. Prior to joining Permira, Nicolas spent five years at technology investment bank Broadview in London, focusing on strategic advisory, M&A and general corporate finance advisory. Explaining the recruitment, Greenpark co-founder and operations/ investor relations director Joanna Jordan said: “We felt we needed someone with good primary fund skills. The bulk of our work involves taking over limited partner interests, but we also purchase portfolios of direct investments and therefore it's useful to have a primary skill set.” Greenpark has also recruited Ottavia Tuinhout as an investment analyst. The firm is currently investing a $200 million fund closed in January 2003.
ATLANTIC-PACIFIC'S HEWETT JOINS TERRA FIRMA
Michael Hewett, currently a principal in the London office of international placement agent Atlantic-Pacific Capital, has agreed to join Terra Firma Capital Partners. Hewett will move to Terra Firma in November to fill the newly created position of investor relations director, Europe. He will work alongside incumbent investor relations director Bill Miles. Hewett joined Atlantic-Pacific in July 1999 after holding a number of investment banking and asset management roles at Morgan Stanley in London and Tokyo. According to a Terra Firma press release, his most recent fundraising assignments include Deutsche Beteiligungs' Fund IV, the $2.2 billion Matlin Patterson Asset Management's Global Opportunities Partners and the 2002 $1.5 billion Resolute Fund managed by The Jordan Company.