ON THE RECORD

What have been the highlights of Vision Capital's recent activity?
Since August 2006, we have made a total of 13 investments, including our first two corporate portfolio acquisitions: a portfolio of four companies from AEA Technology in August and a portfolio of four businesses from Northern Foods in November.

We have also been active on the exit front, completing the sale of two companies. The exit of Cerbo Group represents the final disposal from the portfolio of four assets that we bought from Morgan Grenfell Equity Partners in 2003. Also, the sale of our stake in RoadChef is the third disposal from the portfolio that we acquired from Cabot Square Structured Credit Fund Limited in 2004.

does the new fund change your investment approach?
Our investment approach remains the same: the acquisition of direct portfolios of buyout assets from private equity and corporate vendors. Given our business model, we must have the capacity for widely varied deal sizes, and VCP VI provides us with the flexibility for this. The committed core fund of €350 million facilitates smaller deals, while a further €650 million offers additional capacity for larger deals that would otherwise unbalance the fund. Within less than a year, more than 50 per cent of the €350 million core fund alone has been invested, and we expect the remainder to be fully invested within the next 12 months given the steady flow of the current pipeline.

who are your competitors?
The biggest competition that Vision Capital faces is sales of individual assets within a target portfolio. All sellers have the option to realise the assets in a portfolio separately, so we focus on delivering better value and more flexible solutions through a single transaction. This is an increasingly recognised, attractive proposition for many sellers. We also differentiate ourselves by investing only in buyouts – the large part of the direct secondary market is dominated by venture players.

How has the direct secondary Market changed as it has matured?
Historically, there was a misperception that direct secondary deals were basically distressed deals, which they are not. The direct secondary market is better understood and more accepted now. It has become an attractive exit alternative for successful GPs and successful funds.

How do you think the private equity market should respond to recent criticism on transparency and disclosure? what has been your own reaction?
I think the industry has less to hide than its critics think. However, this is a very serious inflexion point, and the industry must become more transparent and more responsible. I welcome this potential: private equity is becoming a mainstream asset class, and this is an exciting new phase in its history.