Side Letter: Awards winners in full, Performance polemics, Europe’s biggest buyout

The results are in: you can now see who won in the 76 categories of our annual awards. Plus: a round-up on Thyssenkrupp, new hires for Advent and IK, and a clash over performance. Here’s today's brief, for our valued subscribers only.

Just happened

It’s awards week!

Want to see who has been victorious in our annual awards process? The result are out and you can see the full honour roll here. Congratulations to our winners and commiserations to those who missed out. To recap: the shortlists for each category are compiled by us, but the winners are decided by an industry vote. We’ll be zeroing in on geographies and categories throughout the week.

Going up to 17 (billion Euros)

An early contender for 2020’s deal of the year? One of Europe’s biggest ever buyouts was agreed last week, with a group including Advent International and Cinven clinching one of Europe’s biggest buyout deals last week, agreeing to acquire Thyssenkrupp’s elevator unit. Some key points:

  • At €17.2 billion the deal will be Europe’s biggest PE transaction since KKR’s $23 billion take-private of Alliance Boots in 2007, notes Bloomberg (paywall).
  • Separate sources tell PEI that both Singapore’s GIC and Abu Dhabi Investment Authority are also part of the consortium, although a spokesperson for the winning consortium declined to comment on its members.
  • RAG-Stiftung, a €15 billion German foundation, also backed the deal. The foundation, which uses its profits to finance clean-up operations related to aftereffects from the mining industry, is an active PE investor – most recent data (2018) show private equity was its second-biggest asset class accounting for 28 percent of its assets. It’s also a fund investor – Ardian is one of its GPs.
  • Thyssenkrupp will itself reinvest €1.25 billion for a small stake in the elevator unit.
  • Capital comes from Advent and Cinven’s latest flagships.
  • Blackstone and Carlyle Group lost out in the bidding war in what the FT (paywall) noted “must have put a downer on drinks” hosted by the former at SuperReturn last week.

Data-led ding dong

It’s professor vs doctor on Linkedin. Professor of financial economics at Oxford’s Saïd Business School Ludovic Phalippou is trading posts with Wellershoff & Partners’ private markets head Cyril Demaria. At stake is private equity’s reputation for outperforming public markets, which was called into question by Bain & Company last week.

Demaria kicked the discussion off, noting among other points that: Bain’s analysis doesn’t recognise the six-month time-lag between the two data sets; one can’t definitively assess performance of funds that are actively investing; and that it would be more accurate to use PME+ or mPME benchmarks instead of PME/ICM.

Phalippou retorted that: “You can do any adjustment you want. Since vintage 2006, computing PME (which is the most accepted measure in academia for a reason) S&P 500 and LBOs are neck to neck.” It’s a debate which will run and run in 2020.

Karaoke playlist

When PE types gather in numbers, tradition dictates that a semi-secret karaoke meeting will be involved. (Here is a 2013 account, for you PE historians). This year in Berlin the twin threats of coronavirus and late-cycle nerves prompted an even more Bacchanalian session than usual, we hear. Truly the last days of Rome. Club rules forbid us from sharing too much, but some set list highlights included:

  • Gangsta’s Paradise (1995) – SWF professional
  • I Want It That Way (1999) – PE academic and a German-contingent
  • Uptown Funk (2014) – Millennial GPs
  • We are the World (1985) – Large ensemble, including prominent lawyer and secondaries MD

She said it

“It’s no longer possible to generate high rates of return unless you invest for impact. It reflects the economic reality”

Megan Starr, head of impact at Carlyle Group, explains the firm’s decision to adopt impact investing on a company-wide basis, rather than via a standalone fund strategy to Bloomberg.

Essentials

Advent International has hired former TowerBrook MD Nicolas Chavanne to lead its retail, leisure and consumer activities in Europe. 

Mediterrania creates sustainability role. Mediterrania Capital Partners, a growth investor in north and sub-Saharan Africa, has appointed Rajaa Berkkia, previously he firm’s operations director, as director of sustainability.

IK lands Salmon. IK Investment Partners has snapped up a former Duke Street partner and 3i alumnus for its small-cap business. Tom Salmon joins the pan-Europe firm’s London office.

Dig deeper

LP meetings. It’s Monday, so here are some LP meetings to watch out for this week.


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Today’s letter was prepared by Toby MitchenallIsobel MarkhamAdam LeCarmela Mendoza and Alex Lynn.


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