Pleasure and pain: CVC, Carlyle and the AIFMD

A GOOD MONTH FOR…

Chinese conglomerate Fosun International and French PE house Ardian, which finally managed to complete the buyout of French resort operator Club Mediterranée after a two-year slog. The deal, which leaves the consortium holding 92.8 percent of the company, valued the business at €939 million. Fosun, an existing investor in the hotel and resort operator, initially teamed up with Ardian in May 2013 to offer $700 million for the business, kicking off a lengthy bidding process involving a number of parties. The pair’s offer of €24.60 per share in December finally forced rival Italian investor Andrea Bonomi to withdraw.

CVC Capital Partners, which made its first investment from its new technology growth fund. The firm acquired machine-to-machine network Wireless Logic from ECI Partners in a deal that generated a 6.1x return for ECI 9, a 2008-vintage £437 million (€589 million; $665 million) fund. CVC’s new vehicle, led by managing partner John Clark, is currently in market targeting $750 million, of which around half is thought to have been collected. It will primarily target equity investments between $50 million and $200 million in the software and technology-enabled business services sector in North America and Europe.

Secondaries funds, which are outperforming primaries by an (admittedly painfully narrow) average of 0.07x, according to a report from alternative assets software provider eFront. The report compared six different vintage years from 1998 to 2011, looking at the total value to paid in (TVPI), and found that the average outperformance of secondaries funds was 0.07x, or 5.76 percent more than the average performance of primaries.

A BAD MONTH FOR…

The Carlyle Group, which saw its economic net income (ENI), which includes unrealised gains, plummet 65 percent to $182.2 million from $520 million a year earlier. A significant part of the drop is accounted for by the firm’s private equity business — impacted by what Carlyle called the “particularly elevated” ENI in 2013, caused by the Europe Partners III and Asia Partners III funds transitioning into a full carry position — as well as the dramatic fall in oil prices. Still, the firm did better than analysts anticipated, coming in at 56 cents per share instead of 44 cents per share. Every cloud…

The AIFMD, which is apparently not only in fund managers’ bad books but also feeling the heat from LPs. According to an ILPA poll of 3,000 members about the directive’s impact, 86 percent of LPs have seen a drop in the number of non-EU managers pitching funds in Europe, 46 percent have had their efforts to initiate contact with non-EU managers rebuffed, and a disturbing 69 percent said their private equity programmes are at a competitive disadvantage to their non-EU counterparts. What’s more, it’s not even making investors feel their portfolios are safer. The majority of LPs said the directive is having a somewhat or very negative impact on investor protections in Europe, mainly as the result of limited access to GPs.

Black Diamond Capital, which saw the departure of senior managing director Christopher Boyle in January. It is not clear why Boyle left the firm or where he is headed. At Blackstone he was a managing director on the restructuring and reorganisation team. He joined the firm from Blackstone in 2006, working alongside then president and managing director James Zenni, who has since left the firm and gone on to found Chicago-based Z Capital Partners.