Down, not out

20 October 2008

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As this issue of unquote" goes to press, the UK government has announced a ТЃ37bn rescue package for its biggest banks. RBS stood to receive the most, just as Sir Fred Goodwin stood down. The bailout is the second event in as many weeks that is hoped to kick-start the economy. Whether or not it does is not yet discernable (though stock markets seem happy) - but it serves as a stark reminder of what a mess has been made in the last few years

This doomsday should not come as the surprise that it has: HBOS had been king of the UK buyout scene until the early noughties, when RBS took ground lost by the former as it angered erstwhile clients with its innovative integrated finance model (enter BOSIF). Also around this time, Icelandic names starting clouding auctions, arriving with swathes of money. With the exception of a fraud case or two, few suspected anything wayward about the Vikings and their newly conquered territory on the UK highstreet. BOSIF and Iceland were two new and mighty names in the industry.

If their growth spurts caused many to deem them (and others) weeds, pruning should bring about new life. In fact as many bastions of the buyout world falter, innovation and optimism emerge from some outfits that had been operating beneath the radar. Of course the small- and mid-market have long been the real drivers behind the UK market, but now some of these players are receiving more of the attention they have long deserved: mid-market powerhouse Barclays Private Equity announced a new appointment (the same day as its parent proudly declined government help) and small buyout house Bowmark added two to its investment team. These appointments are just a handful of more than a dozen unquote" has covered in the last two weeks - mostly portfolio and investment managers in the small- to mid-market. Clearly some see a future.

Indeed there is still light and innovation among smaller, more flexible outfits and this will see the industry through the current problems. Evidence of this can be found in the submissions for this year's British Private Equity Awards, which reached an all-time high and provided a slew of impressive stories of new products developed by advisers; lucrative exits achieved by GPs; flexible capital structures created by alternative debt providers. This means that all is not lost and that, despite turbulent conditions, value is being created. Congratulations to those shortlisted (see back cover). I look forward to seeing you on 27 November when the winners will be announced.

Yours sincerely,

Kimberly Romaine

Editor-in-chief, unquote"

Tel: +44 20 7004 7449

kimberly.romaine@incisivemedia.com.