| Weekly Round-Up |  |  |
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Weekly Summary
Private equity witnessed an influx of studies this week with the end of the third quarter: Grant Thornton proclaimed that two-thirds of buyout shops will gravitate toward defensive sectors, such as health care and support services, in the near future. Defensive sectors, chosen because of their propensity to produce consistent return, are popular for good reason: 81% of firms are expecting their portfolio companies to breach banking covenants this year.
Dow Jones Private Equity Analyst reported this week on the secondaries market. While the year started off historically strong with $14.1 billion raised in the first two quarters, compared with $2.6 billion in all of 2008, the third quarter of this year had a stark drop-off, with a mere $165.3 million. Pitchbook News released data stating that deal flow for the first three quarters of the year is down 60%, with the last three months witnessing only $7 billion in deals. However, the study found the decline to be "leveling off" because of a steady increase in announced deals and median deal amount.
Pitchbook's ideas have proved insightful; two billion-dollar-plus deals were announced this week by Blackstone and Clayton, Dubilier & Rice. The transactions, which are being lauded as a return to the debt markets, have received serious media coverage. The Wall Street Journal highlighted how the course to completion in the post-recession environment requires far more time and number of banks.     
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Transitions
Arun Sarin has been appointed to Kohlberg Kravis Roberts as a senior adviser. Previously, Sarin was the chief executive officer of mobile telecommunications company Vodafone Group.
Apax Partners has announced two departures: Alex Fortescue as head of the firm's European retail team as well as Michael Grabiner as a partner at the firm.
Ropes & Gray has hired Brad Edmister as a private-equity-focused partner in the law firm's Tokyo office. Before joining the firm, Edmister was at Milbank, Tweed, Hadley & McCloy's Tokyo office.
Inflexion Private Equity, based in the U.K., has hired Angela Galbraith as an origination executive. Previously, Galbraith was at KPMG.
Gareth Davies has joined Greenhill & Co. as managing director of the firm's financing advisory and restructuring group in London.
Saverio Costa was appointed as principal to Pantheon Ventures in the fund-of-funds manager's New York office, where he will focus on the firm's East Coast clients.
CVC Capital Partners announced that Zhu Wei, a senior managing director, has left the firm to join Asia-focused bank Standard Chartered.
Former Candover director Owen Wilson has been appointed vice president at Palamon Capital Partners.
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Stanford shies away from private equity
The organization that oversees Stanford University's endowment, Stanford Management Company (SMC), is reviewing selling partial interest of its private-equity assets on the secondary market. Originally reported in The Stanford Daily, SMC will be taking bids from both investors and secondaries firms through October. AltAssets (10/7)
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Aldus Equity falls by the wayside
Aldus Equity, a private-equity firm that managed more than $7 billion in assets, has folded. The firm gained notoriety when founder Saul Meyer was indicted during the pension-fund pay-to-play scandal earlier this year. The Wall Street Journal/Private Equity Beat blog (10/7)
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PE deal-making on the upswing
Two large-scale deals completed this week, Blackstone's purchase of an InBev unit and Clayton Dubilier & Rice's investment in JohnsonDiversey, have signaled a return to private-equity deal-making. However, unlike previous deals, the course to completion required far more time and number of banks to assist with financing. The Wall Street Journal (10/9)
| Deals | | |
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PE-backed Viasystems makes a deal
Viasystems, which is owned by HM Capital Partners and GSC Partners, has bought shares of Merix. Viasystems is a manufacturer of circuit boards hoping to expand market share with the acquisition of Merix. The Wall Street Journal/Dow Jones Newswires (10/7)
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TPG invests in Russian company
VTB Capital, a Russian private-equity firm, has teamed up with TPG Capital to buy a 35.4% stake in the retail chain Lenta. Deal terms were not disclosed. AltAssets (10/12)
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MUL Principal Investments buys from PE shop
Gelatine-foods producer Tarami KK, a former portfolio company of Sun Capital Partners, has been sold to MUL Prinicpal Investments for about $78 million. MUL is a private-equity subsidiary of Mitsubishi UFJ Lease & Finance Co. AltAssets (10/13)
| Secondaries | | |
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Secondaries fundraising dips in third quarter
Despite a strong start for secondaries fundraising this year -- the first two quarters witnessed $14.1 billion -- the third quarter of 2009 had a mere $165.3 million. Secondaries gained serious attention at the start of the year when investors hoped to cash in on cheap fund interests. AltAssets (10/9)
| In the Portfolio | | |
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Report: Capmark Financial intends to file for bankruptcy
Commercial real estate company Capmark Financial Group is expected to file for bankruptcy as early as next week, according to this report. The company is expected to continue to operate while in court, as well as pursue a debt-for-equity swap to help bring the company back out of bankruptcy. KKR purchased the company with a consortium of firms in 2006 for $1.5 billion. Reuters (10/13)
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RailAmerica shares down after IPO
Short line freight owner and operator RailAmerica saw a loss of its shares on its first day of trading post-IPO. Fortress Investment Group took the company private for $1.1 billion in 2007, and slightly more than half of the shares from the IPO were sold by the firm. The Wall Street Journal (10/14)
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SWFs are not as large, threatening as previously thought
Government-backed SWFs that invest in domestic and international markets have often been regarded as a threat. However, according to a report conducted by RiskMetrics on behalf of the Investor Responsibility Research Institute, their impact on international markets is less and they are more prepared to be open than earlier reported. The Financial Times (tiered subscription model) (10/11)
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GI Partners closes at $1.9B
Private-equity firm GI Partners, which owns the U.K. caravan-parks operator Parks Resorts, raised $1.9 billion this week for its distressed-assets fund. The figure was less than originally anticipated. Bloomberg (10/12)
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Xenon procures $223 million for fund
Xenon Private Equity, a lower-mid-market Italian buyout shop, has closed its most recent fund above target at $223 million. The fund had a wide range of investors, both geographically and categorically speaking. AltAssets (10/7)
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Axis Private Equity eyes infrastructure fund
A subset of private-sector lender Axis Bank has hopes of raising an additional $250 million for its infrastructure fund. Axis Private Equity has already used two-thirds of the first round of fundraising with $150 million. Reuters (10/7)
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