This month we welcome back a feature that looks to highlight some of the ingredients that show off private equity in its best light. That is, the aspect of the industry that the general public and the majority of national newspapers tend to ignore, whether by accident or design. Deal Mechanic (p. 20), examines the transformation that private equity firms can bring to bear on a business, to end in positive results for them both. In this case, it is the story of Permira's acquisition of the Valentino Fashion Group and its subsidiary, Hugo Boss, in May 2007.
Permira paid a combined €5.3 billion, including debt and fees, for the two listed fashion businesses, acquiring 100 percent of VFG and 73 percent of Hugo Boss, but it wasn't long before the first shockwaves of the global financial crisis began to resonate, and a huge retail deal saddled with debt on entry of 8x EBITDA became the last place on earth a private equity fund wanted to find itself. What followed is not only an impressive case study of dextrous financial restructuring, but also a story of leaving behind a better focused and more competitive company on final exit.
How certain other private equity firms would love to garner such positive headlines!
Five months on from the City Link debacle that landed him in front of a House of Commons select committee, Better Capital's Jon Moulton is in reflective mood, after several tough years for his firm. In our Privately Speaking profile (p.22), the engaging Moulton is at his candid best; reflecting on what went wrong with City Link; why the public often doesn't get it; what his industry is doing well and not so well; and why he is in urgent need of an exit or two over the next 12 months.
Speaking of looking to bounce back from tough times, we look at the fundraising appetite for France-only private equity funds (p. 30). Despite the country's reputation for some of the fiercest anti-business regulations in Europe which may have deterred plenty of international LP money in the past, there are signs of a sunnier backdrop, and heightened interest over the past 18 months.
And there's more. On p. 32, we analyse the often overlooked European venture capital sector. We talk to four London-based VC executives who are confident that a brighter future is in store, with Europe's cutting edge tech hubs very much at the centre of that new found optimism. The growing profile of Sub-Saharan Africa investments is the focus on p. 12, with LPs displaying a greater appetite for agri-investing, hand in hand with a more socially-responsible emphasis.
Elsewhere, executives at private equity firms structured as LLPs may want to look closely at our feature on p. 18, where partners at law firm King & Wood Mallesons discuss recent changes to the legal rights of LLP employees, while on p. 38, two senior tax specialists from PwC rekindle the long running debate on how private equity firms should be structuring their tax profiles.
Enjoy the issue,