The early bird ..

16 June 2008

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With much talk surrounding the uncertain economic outlook and the subsequent drop-off in buyout deals, activity in the early-stage segment has tended to be overlooked. While this space has its well-documented problems, the volume of deals in recent weeks is an encouraging sign. Private equity backing for companies in the pre-revenue stage, or in those turning over only small amounts of cash, is more important for the future of the UK as a financial and entrepreneurial centre than buyouts in the hundreds of millions or billions

Initiatives such as the UMIP Premier Fund, a vehicle launched by MTI Partners to support University of Manchester spinout companies, are crucial for the future of the industry in a way that the latest KKR or Blackstone funds are not. MTI recently made its first investment from this fund, providing £1m as part of a $10.8m funding round into Myconostica Ltd, a medical diagnostics company. Companies such as this are the buyouts of tomorrow and innovation from firms such as MTI help ensure future rewards for buyout houses.

On the subject of interesting initiatives, Doughty Hanson has appointed Adam Black, a former KPMG partner, to take responsibility for environmental, social and governance issues in its portfolio companies. With LPs increasingly conscious of their responsibility to ensure investments are ethical and socially responsible, this is an increasingly important area for private equity firms to be focused on and similar appointments are no doubt in the pipeline.

Yours sincerely,

Nathan Williams

Editor, unquote"

Tel: +44 20 7004 7449

nathan.williams@incisivemedia.com.