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Weekly Summary
The private-equity industry continues to make strides as the recession shows signs of ending. Research firm Private Equity Fund & Partner Finance found that more than a third of GPs from the U.K. expect their next fund to be larger than their current one, and only about 10% expect a decrease in the next fund. On a similarly optimistic note, 83% of GPs are anticipating receiving carried interest from their current funds, a stark contrast to previous LP concerns. The study characterizes the findings as "very encouraging" considering the economic landscape.
This optimism is certainly not lost on Lone Star. The veteran real estate private-equity shop, which is currently raising $20 billion to buy distressed debt, is cutting fees more than 50% to attract new LPs. The Wall Street Journal characterized the decrease as a clear sign that real estate funds need to make a concerted effort to "regain credibility."
Efforts such as Lone Star's explain the recent resurgence in hiring within the private-equity world. Banks, law firms and new startup buyout shops have all announced recent recruiting. Experienced executives are going to be necessary in the near future: Cambridge Associates U.S. Private Equity Index reported $7.4 billion in capital called during the second quarter of the year, up $1.1 billion from the first quarter of the year.
Stephen Pagliuca, of Bain Capital fame, has taken a different avenue toward altering the community's perception of private equity. Currently second in the polls, Pagliuca has already spent $2 million of his own money to campaign for Edward Kennedy's former Senate seat. His main platform centers on creating "good paying jobs" for Boston's middle class. 
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Transitions
Fondinvest Capital, a French fund-of-funds manager, has named Catherine Lewis La Torre as a partner. Before joining the firm, she was a founding partner of Proventure, a fund-of-funds manager focused on the European middle markets.
Placement agent Capstone Partners has hired Louis de Saint-Marcq as an associate partner in the firm's European office. Previously, he was with Goldman Sachs as an executive director of equities.
Mark Wesseldine has joined the London office of law firm Fried Frank, as a partner focused on leveraged finance transactions. Before joining the firm, he was a partner at Allen & Overy.
Apax Partners announced Max Burger-Calderon has retired as chairman of the Asian arm. He will now become a part-time nonexecutive chairman. The firm has no plans to replace him as of now.
Southfield Capital Advisors has hired Steven Axel as head of a new mezzanine fund. Before joining the firm, Axel was a managing director with Calvert Street Capital Partners.
Jon Moulton has hired Nick Sanders to join his new buyout shop, Better Capital. His role will be head of portfolio operations.
President Barack Obama has nominated Blue Wolf Capital Operating Partner Joshua Gotbaum to head the U.S. Pension Benefit Guaranty Corp.
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Private equity quickens its pace
Cambridge Associates released data this week illustrating a much kinder private-equity landscape than in previous reports. The firm's U.S. Private Equity Index reported a $7.4 billion call in capital during the second quarter of the year, up $1.1 billion from the first quarter of the year. The Wall Street Journal/Private Equity Beat blog (11/9)
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Stephen Pagliuca vies for Senate seat
Stephen Pagliuca, best known as managing director at Bain Capital, is campaigning for Edward Kennedy's seat in the Senate. Pagliuca has already spent $2 million of his money on the operation and is second in the four-way Democratic race thus far. Bloomberg (11/9)
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Lone Star takes alternative approach
To raise a $20 billion fund to buy distressed debt, John Grayken, the head of Lone Star Funds, is cutting his fees more than 50%. Although the firm has executed better than many of its competitors during the recession, the move signals a need for new efforts to win LP commitments. The Wall Street Journal (11/11)
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Optimism returns to U.K. GPs
According to new research from Investec Private Equity Fund and Partner Finance, more than one third of U.K. general partners expect their next fund to be larger than the existing fund. The study quotes Simon Hamilton of Investec Private Bank as saying the industry is "in a relatively upbeat mood." AltAssets (11/9)
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Northrop sells business unit to buyout firms
Buyout firms General Atlantic and KKR have bought the TASC consulting unit from defense contractor Northrop Grumman for $1.65 billion. A few months ago, Northrop hired investment banks to sell the unit, which advises government military agencies. This drew interest from a number of private-equity firms. Reuters (11/9)
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BC Partners buys ATI Enterprises
In a $500 million deal, BC Partners has acquired college-campus operator ATI Enterprises. It has been reported that the deal was financed with about $250 million of debt and with $50 million of the purchase price being withheld to cover any unexpected costs. BC Partners hopes to capitalize on the growing education market in the U.S. AltAssets (11/10)
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PE firm buys software developer OpenLink
As the credit markets show improvement, private-equity deals have been picking up. One example is Carlyle's acquisition of software developer OpenLink Financial from TA Associates. Terms of the deal have not yet been disclosed. Reuters (11/9)
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Secondaries fund raised by Portfolio Advisors
Investors looking to take advantage of the increase in secondary fundraising have allowed such firms as Portfolio Advisors to collect $1.1 billion for its first secondaries vehicle, surpassing its original target of $600 million. The fund, which is 20% committed, consists of 12 transactions made up of 71 funds invested in more than 1,000 companies. AltAssets (11/5)
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Blackstone and Fortress gaining ground in the market
The positive third-quarter earnings for Blackstone Group and Fortress Investment Group are proof that things are improving for private equity and hedge funds. Blackstone's CEO said the firm hoped to have several IPOs in its PE business in the next few months that would return about $3 billion to its investors, and Fortress hopes to recover some previous losses and resume collecting incentive fees. The Wall Street Journal (11/7)
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Qatar to sell Volkswagen shares
Qatar Holdings has announced plans to sell as many as 25 million of its preferred shares in Volkswagen. Credit Suisse Group and Goldman Sachs are set as joint bookrunners for the sale. The New York Times/Dealbook (11/10)
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World's second-largest SWF soars
Norway's sovereign-wealth fund recorded a 13.5% increase in the third quarter, according to the central bank. This quarter has been the "highest return we've ever had," according to the head of Norges Bank Investment Management, Yngve Slyngstad. Bloomberg (11/10)
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WAMEX raises money for second fund
Mexican-based WAMEX Private Equity Management has held a first close of $55 million on its second private-equity fund, Multinational Industrial Fund II (MIF II). The fund plans to target investments in middle-market companies based in Mexico. View the release.
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