Weekly round-up: diversifying investor bases

In an exclusive video, Shaun Middleton, managing partner of UK mid-market firm Dunedin, spoke to Kimberly Romaine about the investor base of the GP's third fund and the challenges of the mid-market. Highlighting the increasingly favourable outlook transatlantic players have of the UK market, Middleton said: "After a successful first close where we had reached over 60% of our target, we went over to the US at the beginning of 2013. The perception of the UK had changed in that period and those investors that were looking further forward understood that the UK was the best place to be if they wanted to be in Europe."

Indeed, sentiment certainly appears strong in the UK on the back of a bumper year for fundraising and flotations. unquote" reviewed the industry's results in 2013 and outlined expectations and challenges for the upcoming year. One such hope is for the number of LPs executing co-investments to continue to rise. "GPs accept that offering co-investments is a way of life now due to their obvious attractions for LPs. However, only a minority of LPs have the mandate and the requisite skills to execute co-investments, but this number should grow further this year," said Paul Newsome, head of investment selection and monitoring for private equity at Unigestion. And with fundraising expected to continue across 2014, LPs appear set for a busy year. 

The tax debate and higher levels of political scrutiny over private equity are making onshore fund structures increasingly popular in the Nordic region, said participants at a BVCA-hosted conference in London last week. unquote" explored the impact of the region's recent tussle with the tax authority on fund structures, but is the shift a permanent or temporary solution?

After a poor third quarter, a strong bounce back saw Q4 2013 go down as the strongest quarter of the year, according to the latest unquote" Private Equity Barometer, published in association with SL Capital Partners. The buyout space led much of the quarter's value uplift, accounting for €21.1bn of the overall total, a 37% increase on the €15.4bn recorded in the previous quarter. 

It comes as no surprise that a fractious board can ruin the chances of successfully turning a distressed company around. unquote" assessed the importance of unity at board level and questioned the relatively low number of turnaround deals recorded in the UK. According to unquote" data, despite an uptick in 2009 when 12 deals were closed, the UK over the last five years has been dismal for turnaround deals, dropping to just two transactions in 2013.  

That's all from me this week but if you have any comments on this week's analysis, please send your thoughts to amy.king@incisivemedia.com.

You can continue to follow me and the rest of the unquote" team via @unquotenews for all the latest private equity and venture capital updates, and of course on unquote.com.

Amy King
Senior Reporter, unquote"

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