Nicola Horlick, one of the UK's most famous quoted equity managers, has warned the private equity industry to promote itself better or miss the opportunity for further growth.
Horlick, chief executive of fund manager Bramdean Asset Management, spoke out in mid-September at the Private Equity COOs and CFOs Forum in London run by PEI Media, the publisher of Private Equity International.
She said: “Private equity is not doing enough to court or educate UK pension funds. It has had a low profile. And it was outrageous this summer how much animus against the industry came out in negative articles, because the industry isn't well organised.”
She continued: “It is important to stress private equity is doing everyone a favour, if businesses [after a buyout] are better managed. It needs to get away from [its reputation for] asset stripping. Quite apart from anything else, businesses don't have assets like they used to.”
Bramdean earlier this year raised a new £131 million (€194 million; $264 million) listed fund of funds to invest in private equity and hedge funds. Horlick said such funds provided a solution for retail investors looking to diversify into private equity but who would struggle to access the best performing managers.
She added that listed products needed to think carefully about cash drag and maintained that KKR Private Equity Investors, the fund floated by Kohlberg Kravis Roberts earlier this year, had traded well down on its issue price because of the large amount of uninvested cash on its balance sheet.
Bramdean uses surplus cash generated by hedge funds to mitigate the Jcurve characteristic of less liquid private equity funds.
Horlick, a well-known figure in the UK, was given the tag “Superwoman” in the press for juggling a high-flying City of London career with the demands of bringing up a large family. The image was strengthened when, two years ago, she fought off an armed robber who was attempting to steal her diamond ring.
Having made her name as chief executive of Societe Generale's asset management arm, Horlick launched Bramdean in 2004.
USS LAUNCHES CO-INVEST PROGRAMME WITH DOUBLE HIRE
Universities Superannuation Scheme, the second-largest UK pension fund with £30 billion (€44 billion; $61 billion) under management, has launched a co-investment programme following the expansion of its alternative assets team with the appointments of Fraser Booth and Geoffrey Geiger. Booth has joined from Railpen Investments as portfolio manager focusing on fund selection within private equity and infrastructure. Geiger has come from Klesch & Company, a private equity firm in London. Geiger will work alongside Booth as a due diligence analyst with a focus on managing co-investment transactions. The pair will co-invest between £25 million and £75 million per deal as they build the portfolio from scratch.
CVC BRINGS IN FORMER RBS FINANCE CHIEF
Pan-European buyout firm CVC Capital Partners has appointed Fred Watt as chief operating officer in a newly created role. Watt has spent more than 25 years working for a succession of public and private companies, primarily in financial roles. From 2000 to 2006, he served as chief financial officer at the Royal Bank of Scotland. Last summer, Watt was hired by Doughty Hanson as chief financial officer of a €1 billion listed private equity fund the midmarket firm was marketing at the time. In October, Doughty abandoned the project when the IPO market proved unreceptive to listed private equity products. At CVC, Watt will sit on the group management committee and the board of directors.
GERMAN POLITICIAN DEMANDS PARTIAL “LOCUST” BAN
A senior German politician has said Germany needs laws to help corporations in some strategically important domestic markets protect themselves against the growing influence of financial investors. Peter Struck, leader of the SPD faction in the Bundestag, Germany's lower chamber, said that a country dependant on industry could not tolerate “locusts” acquiring German businesses with ease. Struck, a former minister of defence whose left-of-centre party is part of Germany's grand coalition government alongside Chancellor Angela Merkel's conservative CDU, said limitations on private equity firms buying into German businesses should be made law.
ADVENT CONCLUDES RE-ORGANISATION WITH KIEV OFFICE
Global private equity firm Advent International has opened a new office in the Ukraine. Tamas Nagy has been appointed head of the Kiev office and Natalie Polischuk as principal. The move marks the end of a wider re-organisation of the company's operations in the Central and Eastern European region. Advent opened an office in Prague in May to complement existing offices in Poland and Romania. The firm used to have an office in Hungary but Hungarian activities are now run out of the Prague office. The firm is also active in Slovakia, Turkey and the Baltic states.
BERTELSMANN EXECUTIVE SET TO JOIN BC PARTNERS
Ewald Walgenbach, head of Bertelsmann's Direct Group unit, is in talks to join European buyout firm BC Partners, having decided to resign from the German media group by the end of the year. The Direct Group sells CDs and books on the internet and in shops. Walgenbach had been a contender to become CEO of Bertelsmann following the departure of Gunter Thielen, but the job went instead to Hartmut Ostrowski in January this year.
ELDEN REJOINS AIG TO LEAD TURKEY EFFORT
AIG Investments, the global asset manager, has appointed Serkan Elden as managing director of AIG Capital Partners, its emerging markets private equity investment arm, and CEO of AIG Blue Voyage Advisors, which oversees the firm's investment activities in Turkey. Elden will be based in Istanbul. From 1998 to 2004, he managed and led private equity investments from the Turkey-focused AIG Blue Voyage Fund out of AIG's Almaty, Baku and Istanbul offices. Elden then left AIG to join Fintura Holdings, a provider of mobile telecom services in Azerbaijan, Kazakhstan, Georgia and Moldova. He was originally a senior investment adviser to Fintura's management, becoming CEO in January this year.
7TH PARTNER FOR BALDERTON
Balderton Capital, the venture capital firm behind social network site Bebo, person-to-person betting exchange Betfair and TV channel Setanta Sports, has hired Tim Bunting, a former vice chairman of Goldman Sachs International, as a partner. Bunting, the firm's seventh partner, will work on both new opportunities as well as Balderton's current portfolio. He spent 17 years at Goldman Sachs in a variety of senior roles, becoming vice chairman in 2005. Balderton, which until recently was the European affiliate of US venture firm Benchmark Capital, has $1.5 billion in committed capital under management. Since 2000, Balderton has invested in over 70 companies across a wide variety of technology sectors and geographies, including UK, US, China, Russia and Scandinavia.
EUROPEAN CAPITAL BUILDS IN GERMANY
European Capital has boosted its team by appointing Bernd Schaessburger as an investment director of its financial services team, in anticipation of a resurgent mezzanine market. Schaessburger becomes part of the firm's Frankfurt based Germany team headed by managing director Robert von Finckenstein, which has been increased to four people. Another person will join the team shortly. Schaessburger has worked in mezzanine roles at DAM Capital and before that at German bank Dresdner Kleinwort for two years at both companies. He will work on origination, structuring and execution of deals at European Capital.
Mezzanine debt has been in retreat for some time as banks lent senior debt in more aggressive structures, taking advantage of the liquidity provided by hedge funds and collateralised loan obligations. The credit crunch has forced a re-pricing of risk, which some believe will create opportunities for mezzanine lenders to steal back market share.
NEW CHALLENGE FOR ECI VETERAN
Monument Group, a private equity placement agent, has boosted its team in Europe with the appointment of Janet Brooks, a 15-year veteran from UK mid-market firm ECI. Brooks, formerly a director and board member of UK middle-market private equity firm ECI, joined Monument's London affiliate in October. At ECI Partners, Brooks was responsible for the firm's investor relations and fundraising. She was one of the first such internal investor relations professionals in Europe.
Monument Group opened a London office in 2005. Martin Anthonsen, formerly a senior member of the investment teams at Nordic Alternative Investment Advisors and financial group Lönsförsökringar, joined shortly after the London office opened as a managing director. Laurence Zage, managing director, and Steve Cahill, vice president, both joined from Helix Associates, where Zage was head of research. Monument is advising UK mid-market group Vitruvian Partners on its debut fundraising.