So you are a successful private equity firm. But you and your industry have an image problem. In fact over the years your industry has earned a negative reputation for asset-stripping and job cuts.
And just at the moment when the global economy is beginning to wobble you make an investment in Germany, birthplace of the locust.
For any of you that have been oblivious to the locust debate, here’s a brief recap: In April 2005, Franz Müntefering criticised the market economy of Germany and proposed more state involvement to promote economic justice. In this speech, he described private equity firms as “locusts”. He subsequently published a “locust list” of companies, which he circulated within the SPD. This began a debate which has dominated the national news, was the subject of front-page articles and covered on the main television news broadcasts nearly every day.
Locust of joy
CVC Capital Partners is paying €2.4 billion ($3.7 billion) for a 25 percent stake in Evonik, a German chemicals conglomerate looking to list on Frankfurt’s DAX exchange.
Evonik has announced this with an advertisement for its investment in the German newspaper Franfurter Allgemeine Zeitung, a detail of which is reproduced here.
For non-German speakers, this is a witty effort to deflect any negative prejudices by tackling the issue head-on. It is a picture of a locust but its labeling is a corruption of two German words Heuschrecke and Freude, which mean locust and joy respectively. Freuschrecke is then the locust of joy or “Hopperus Investorus”.
Evonik says in the ad it is looking forward to a successful future with its new partner CVC Capital Partners, which of course is lovely.
Let’s just hope the relationship works out, otherwise the unions and the media have been handed a gift.