The year was 2005 and Franz Müntefering, then chairman of the German Social Democratic Party, famously likened the behaviour of certain private equity firms to locusts in an interview with Bild Am Sonntag . He liked his idea so much he subsequently published a “locust list” of companies. To be clear: he was not a fan of private equity.
Fast forward to 2016 – after years of lobbying and PR efforts by the industry – and private equity is still blighted by those devilish little grasshoppers. This time, however, the blight is not metaphorical; it's real.
Gourmet burger restaurant Byron has certainly pleased a lot of diners – First Round included – since it was first established in 2007 as part of the Gondola Group, a casual dining conglomerate that has at various points owned Pizza Express, ASK Italian and Zizzi. Among Byron's fans is former UK chancellor George Osborne, who famously had someone tweet a picture of him eating a takeaway Byron while putting the finishing touches to a public spending review in 2013.
Byron has also, no doubt, pleased Cinven and its LPs. The firm's investment in Gondola returned 2.4 times their money once all the restaurant chains had finally been sold (Byron went to Hutton Collins, ASK and Zizzi to Bridgepoint and Pizza Express to Hony Capital). Not bad for a pre-GFC investment.
Byron has not, however, pleased everyone. In July two London branches of the restaurant had to close their doors after protesters – angry at the chain's treatment of its immigrant staff – unleashed a plague of locusts among the diners. They also threw in some cockroaches for good measure. It's good to see these protesters understand their private equity history.