A touch of frost

01 December 2008

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A chilling frost has gathered around the private equity world for the winter season of 2008, especially in the leveraged buyouts department which has all but ground to a halt with only the EUR300-500m Socotec deal closure to speak of. With only limited optimism for any new notable buyouts being completed before the turn of the New Year, it is time to look ahead to the possibilities in 2009. The general consensus among investors, and indeed the French finance minister, is that although 2009 may start slowly there is expected to be a crescendo of activity during the year

Many investors seem funded to do just that. The run up to 2009 saw three funds close over the billion euro mark. Bridgepoint led the way by closing its fourth fund ahead of its target on EUR4.8bn followed by Nordic Capital which closed its seventh fund on EUR4.3bn. TowerBrook Capital Partners closed TowerBrook Investors LP III on its hard cap of $2.8bn while US compatriot Oaktree Capital Management LP closed its second European private equity fund, OCM European Principal Opportunities Fund II LP, on EUR1.8bn.

Another fund, however, has gone the opposite way and decided to offer the possibility of scaling down investments. Permira offered its limited partners a fair way out by relinquishing a quarter of all profits of Permira IV, the EUR11bn fund. The fund, which is 52% drawn down will allow limited partners to reduce their commitments by up to 40%.

On another positive note, two large EUR20m expansion deals took place. Demeter Partners, Schneider Electric Ventures and TechFund returned for a second EUR20m capital increase in Solairedirect, a renewable energy producer. Also joining the original investors were the new investor duo Ofivalmo Partners and Macif. Edmond de Rothischild Investment Partners for their part led a second round of financing of Supersonic Imagine, a developer of a unique medical ultrasound technology for assessing tissue elasticity, by providing EUR7m of the total investment. Returning investors Auriga Partners, Credit Agricole Private Equity (CAPE), NBGI Ventures and BioAm rounded up the investment.

It's with this news that I wish you all a merry Christmas and all the best for 2009.

Yours sincerely,

Francois Rowell, Editor, France unquote"

Tel: +44 20 7004 7524

francois.rowell@incisivemedia.com.