BVCA names advisory board

The British Private Equity and Venture Capital Association (BVCA) has launched a Research Advisory Board to provide guidance and advice to the private equity industry. The eight-strong board is comprised of private equity professionals, academics, consultants and representatives from the LP community, and it is anticipated that their leadership will provide insight to the BVCA.

The Board will meet three times per year, with the first meeting on 5 December 2008. The board members are:

Richard Wilson (Apax Partners) - Chairman

Hugh Lenon (Phoenix Equity Partners)

Graham O'Keeffe (Atlas Ventures)

Viral Acharya (London Business School)

Gordon Murray (Exeter University)

Mike Wright (Nottingham University)

Harry Nicholson (Ernst & Young)

Carol Kennedy (Pantheon Ventures)

TTP Ventures to manage new IT VC fund

TTP Ventures has been chosen to manage a new £30m Enterprise Capital Fund (ECF) specifically designed to invest in early stage IT and clean technology businesses. Capital for Enterprise Limited, which administers the ECF scheme for the government, selected TTP as the manager.

The fund has received a £20m commitment from the UK government. This funding is combined with private commitments in order to address the "equity gap" that is believed to plague small and medium enterprises (SMEs). ECFs invest up to £2m in small and medium-sized companies across the UK.

Based in Hertfordshire, TTP is a specialist venture investor in the early stage IT and cleantech space. In addition to the £30m ECF, TTP manages its first £34m fund, which has had three exits: Element 14 ($250m), Alphamosaic ($123m) and Oxford Diffraction ($37m).

TTP typically invests £500,000-2m per company, but can also make seed capital investments.

Punter Southall survey:Pensions a "major concern"

Pension liabilities have become a growing concern for private equity since the Pensions Regulator flexed its Financial Support Directions muscle to force Duke Street to cough up £8m recently to plug a shortfall in an under-funded pension scheme in Focus DIY - a year after the buyout house had sold the company (unquote" 3 November 2008, page 10).

Such worries only add to the woes in today's market. Increasing life expectancies equates to increasing liabilities during ownership, which if not priced-in at entry, could result in a loss at exit. In a recent study of 16 buyout houses in the UK, more than half cited this as a major concern. That said, more than 40% believe they price pensions more cautiously than the rest of their industry, meaning they anticipate actually profiting at exit, according to the study conducted by Punter Southall Transaction Services.

The study reveals that there are not many buyout houses willing to buy out a pension scheme at the current going rate; citing a substantial fall in price as necessary to sweeten and thus facilitate the deal. Of those surveyed, only a quarter are prepared to pay 120% or more of the FRS 17/IAS 19 measure, against a typical buyout cost of roughly 130-150% of the FRST 17/IAS 19 measure.

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