Tell me something good

The bad news is increasingly impacting the private quity bigwigs, with Guy Hands recently forgoing his EUR40m bonus after announcing Terra Firma would return to LPs some £70m of performance fees generated since 2004 (a move mirrored in the US by the management of Blackstone Group).

The decision is an acknowledgement of deals gone wrong and shows the industry's willingness to detach itself from the contentious culture of banking. It also comes in the wake of Candover's announcement that it would conduct a strategic review after writing down its portfolio by half (see cover).

However such headline-grabbing topics cast a shadow on the industry's triumphs, which are quietly increasing in regularity. Just last week Dunedin defied the odds to sell its portfolio company Fernau to a US trade buyer, generating a staggering 92% IRR and 3x money multiple. Rather than low-balling, the buyer offered up a handsome price tag (£32m) at the onset. New deals are happening too: LDC secured £18.5m of debt from Yorkshire for the buyout of Quantum, and earlier this year ECI completed the £33m take-private of Ascribe.

And it's not just the mid market: just last month Permira successfully closed its $3.6bn take-private of NDS - noteworthy not only as a mega-deal, but also because of the beleaguered GP's ability to make a draw down, and to secure senior and mezzanine debt.

So, contrary to popular belief, debt is available for the right deals (see debt feature, page 13), and good businesses are indeed for sale.

Yours sincerely,

Kimberly Romaine

Editor-in-chief, unquote"

Tel: +44 20 7004 7526

kimberly.romaine@incisivemedia.com

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