3i's communications people are a busy bunch. Ever since Phillip Yea arrived in July 2004 to take over as chief executive, the world's largest quoted private equity provider has been going about its business with a spring in its step. It has also made a habit of making eye-catching announcements about its increasingly wide-ranging activities.
In the ten days prior to this magazine going to press, there were no less than three such announcements. First, the firm revealed that it had closed its latest European buyout fund on €5 billion, the largest such fund ever organised to finance mid-market LBOs.
Just a few days later, on the other side of the planet, 3i emerged as a cornerstone investor in a €620 million reinsurance venture in Malaysia. Then, back in London, it unveiled the latest project yet, the formation of a new business line to acquire stakes in listed European mid-caps.
Investing off its balance sheet, 3i will seek to apply private equity techniques t boost the value of its positions, In doing this, the firm explained, it would be “active” rather than “activist” in its approach, code for saying that there will be a limit to the level of aggression it will bring to the table. A 20 percent internal rate of return is being targeted.
To execute the strategy, 3i has brought in a team of senior executives who know their way around the public markets. Bruce Carnegie-Brown, who will be at the helm, is a former CEO of Marsh, the insurer, and has also held senior positions in European investment banking. Stephen Hill used to run Sporting Exchange, a betting company, as well as the Financial Times newspaper and publishing group. Richard Segal is the former head of PartyGaming Complementing the line-up of senior managers is Alan McKay, a 3i veteran.
To these four, one of the incentives to build this business for 3i must have been the fact that, with the firm putting its own capital at risk, fundraising won't be necessary. Instead, deal making can commence straight away. In addition, their pay must be attractive, too. CEO Yea is widely believed to have spent much time on 3i's remuneration strategy. By all accounts, his work is bearing fruit.
LEFT TO LEAD CERBERUS EUROPE
Cerberus European Capital Advisors, an affiliate of New York-based Cerberus Capital Management, has named Kenneth Leet as president. Leet joined the Ford Motor Company in August as a special advisor to Ford's chairman and chief executive officer Bill Ford. Prior to Ford, Leet spent more than 18 year at Goldman Sachs, where he was a partner in the company's investment banking division. Leet will work closely with John Snow, who became the chairman of Cerberus Capital Management in October. Snow was the 73rd US Secretary of the Treasury and served under President George W. Bush.
CDC GROUP APPOINTS GENERAL COUNSEL
CDC Group, a UK Government-backed emerging markets private equity fund of funds manager, has appointed Mark Kenderdine-Davies as general counsel and chief compliance officer. He will be responsible for all legal and compliance aspects of CDC's activities worldwide and will advise the CDC board and investment committee on legal and governance matters. He joins CDC from asset management firm Gartmore Investment Management, where he was legal counsel for two year. CDC Group has net assets of $2.9 billion targeting businesses in emerging markets with an emphasis on Africa and South Asia.
EAC LOSES THREE PARTNERS
EAC, a UK mid-market private equity firm, is winding down its investment business and has let go three partners including co-founder Robert Mason. Bill Robinson, also a co-founder, and Erick Rinner, a partner, have taken over the running of EAC as managing partners, according toa statement. As well as Mason, Paul Downes and Jonathan Heathcote, both partners, have decided to leave EAC and pursue different career paths, The firm said this would happen after an appropriate period to secure a handover of various investee company responsibilities. The firm raised its third fund in 2002 with a final closing at €223.5 million.
MERLIN CO-FOUNDER JOINS ESPRIT
Esprit Capital Partners, a European technology venture capital firm, has appointed Peter Keen, Merlin Biosciences' co-founder, as a partner. Keen, who left Merlin in 2004, will be responsible for Esprit's financial and fundraising activity, particularly in the healthcare sector. Keen co-founded Merlin in 1996 and was UK managing director until early 2003.
QUESTER RECRUITS NEW DIRECTOR
Quester, a UK early-stage technology venture capital investor, has appointed Sergio Levi as director. Levi joined Quester's information communications and technology team in January 2006 as an investment director. London-based Quester manages more than £200 million (€295 million; $378 million) on behalf of institutional investors, Uk universities, and three Quester-branded quoted venture capital trusts.
DUNEDIN ADDS DUO
Dunedin, a UK mid-market private equity house, has appointed Giles Derry and Mark Ligertwood as directors. Ligertwood joined Dunedin in 1999 following a six-month secondment from Ernst & Young's corporate finance department. Derry joined Dunedin in 2005 following the company's acquisition of Sand Aire Private Equity for an undisclosed amount. Dunedin is a mid-market private equity firm focusing on UK buyouts with a £10 million to £75 million deal size.
SOFINNOVA LURES WANADOO CHAIRMAN
Oliver Sichel has become a partner at Paris-based venture capital firm Sofinnova Partners. He joins from France Telecom's Wanadoo unit, where he was chairman and chief executive. Sichel joined France Telecom in 1998 and became chairman of Wanadoo in 2002. He restructured the internet and directory company's activities in Spain, the Netherlands and the UK and developed the online yellow pages directory.