Pleasure and pain: Phoenix, Blackstone and co-investment

A GOOD MONTH FOR…

Latin America-dedicated funds, which had a record year for fundraising in 2014. According to data released by the Latin American Private Equity and Venture Capital Association (LAVCA) capital committed to Latin America-dedicated PE and venture capital funds reached $10.39 billion, exceeding the previous record of $10.27 billion in 2011. Fundraising is also getting more diverse, with 56 fund closings in 2014 compared to 35 in 2011. The five largest funds accounted for 81 percent of total committed capital in 2011 and 58 percent in 2014.

India’s private equity community following clarification from the Indian government on the General Anti-Avoidance Rule (GAAR), a regulation designed to prevent private equity firms and other investors benefitting from offshore tax havens. In the country’s 2015 budget finance minister Arun Jaitley said GAAR would be deferred for another two years and will only apply to investments made on or after 1 April 2017, grandfathering any private equity deals which may have been subjected to the tax if applied retroactively.

UK-based mid-market firm Phoenix Equity Partners, which bagged an impressive return of more than 3.5x on the sale of its stake in media and exhibitions business CloserStill Media to Inflexion in a deal valuing the business at more than £100 million (€139 million; $151 million). For Inflexion, which acquired just under 50 percent, this deal is the first from its shiny new Inflexion Partnership Capital Fund I, a £400 million vehicle dedicated to UK mid-market investments which closed in September last year.

A BAD MONTH FOR…

The Blackstone Group, whose senior managing director Anjan Mukherjee asked not what his country could do for him but what he could do for his country, jumping ship to join the US Treasury Department. Mukherjee was in Blackstone’s private equity unit and on its investment committee, reportedly involved in the acquisitions of Stiefel Laboratories, Polymer Group, and Emdeon. At the Treasury he will be counsellor to the secretary and deputy assistant secretary for financial institutions, advising on the markets and matters related to financial institutions.

Former Lone Star executive Randy Work, who was ordered by a London judge to split his £150 million ($226 million; €210 million) fortune down the middle with his estranged wife after he attempted to use a US postnuptial agreement to limit her share to only £5 million. Work’s lawyers tried to argue that he was entitled to a greater share of the couple’s assets because he made a special contribution to the fortune through his wealth-creation skills. However, Judge Edward Holman ruled that Work’s financial achievements were “not exceptional enough” to be considered a special contribution given that his wife had made a sacrifice to raise their family.

Co-investment, which came under fire at the EVCA’s Investment Forum in Geneva. Tim Jones, chief executive officer and deputy chief investment officer at Coller Capital told delegates that co-investment is a “bad trend” which forces GPs to do deals that are larger than their strategy, with LPs’ hunger for co-investments causing GPs to increase their financial firepower by up to 25 percent.