‘Long-term performance is what matters in private equity‘. This oft-recited statement is a truism in the sense that clearly what happens over a ten-year period is of more significance than, let's say, a mere 12 months. Keeping the thought firmly at the front of one's mind is also a way of retaining sanity during periods of excessive froth (think cheap debt boom) and famine (think credit crunch).
For participants in the UK's Three Peaks Challenge, however, such traditional theory goes out the window. The July event will see teams from the legal and financial worlds – including representatives from private equity firms Advent International, Barclays Private Equity and Phoenix Equity Partners – seeking to scale the highest mountains in England, Scotland and Wales within a mere 24 hours.
Whether experiencing a series of peaks and troughs in such a short timeframe will result in a temporary loss of sanity remains to be seen. One thing for sure though: it's all in a good cause. The organiser of the event, CARE International, is aiming to raise a total of £1.2 million from a series of 12 outdoor challenges. The cash raised will go towards helping 55 million people in over 60 countries find a route out of poverty. Details of CARE events can be found at www.carechallenge.org.uk.
“What the private equity firms are doing is what the hedge funds were doing when they were buying the subprime mortgages. They were effectively putting up a small amount of equity and hoping the amount they would receive back in positive spread would pay off that equity before the market went down.”
Guy Hands of Terra Firma says private equity firms are taking the same risks as subprime investors by buying up leveraged buyout loans, in an interview with Bloomberg.
“If you are relying on capital markets … that's relying on the kindness of strangers.”
Richard Cashin, managing partner, One Equity Partners, talking about exit routes at the Milken Institute's Global Conference 2008.
“We will… elevate our current co-operation with The Carlyle Group to an even higher and broader level.”
Lv Zaimo, director general of Department of Foreign Trade and Economic Cooperation of Shandong Province in China, in a statement noting a “memorandum of understanding” between Shandong Province and Carlyle to “enhance trade co-operation and stimulate investment in the province”. (see Asia Monitor, p.32).