Weekly round-up: Make hay while the sun shines on public markets

Last year there were more than 40 private equity- and venture capital-backed IPOs across Europe, according to unquote" data, and a further 19 occurred in Q1 2014. GPs are eagerly taking advantage of the return of flotations as an exit route. unquote" analysed the drivers behind market appetite, and assessed whether the industry is in danger of slipping into old and dangerous habits. "Private equity houses and bankers are very conscious of not doing something that closes the market," says David Vaughan, IPO leader for UK and Ireland at EY. "Nobody wants to be where we were in 2008-10. Having open and functioning equity markets is in everybody's interest and people are genuinely trying to make sure they do not make the same mistakes that were made in late 2006-07." But with a handful of IPOs pulled in recent weeks, how long will the window remain open?

Panellists at the recent Listed Private Equity (Lpeq) conference held in London debated the importance of regular payment of dividends to shareholders. unquote" outlined the implications of presenting listed private equity as yield stock and addressed the issue of trading at a discount to NAV. Though perhaps the main challenge lies elsewhere: "Gearing is the issue, not yield. If a portfolio could lower its gearing then it would appear more attractive to investment trusts, despite the dilution it would cause to returns," says Gervais Williams, managing director of investment company Miton.

The focus is changing in private equity recruitment, shifting away from growing headcount in investor relations and client services to focus instead on headhunting those able to provide comprehensive financial analysis. unquote" spoke to Gail McManus, managing director at Private Equity Recruitment, about the changing trends in hiring within the industry, and assessed the recent spate of departures at several high-profile firms.

London Stock Exchange Group launched Elite in April – a programme that brings together high-growth companies to help them access and prepare for investment to support further growth. But is the programme just a pre-IPO finishing school for top-of-the-class start-ups? Not according to the Business Growth Fund's Stephen Welton, who suggests that the private equity industry may have reason to rejoice. "The mid-market and the lower mid-market are incredibly intermediated. One thing that private equity needs is more opportunities. Stimulating growth from the bottom will create more dealflow for private equity," he says.

That's all from me this week but don't forget that entries are now open for the unquote" Awards, to be held in London on October 2. To submit your entry, please visit the dedicated website. Good luck!

If you have any comments on this week's analysis, please send your thoughts to amy.king@incisivemedia.com.

You can continue to follow me and the rest of the unquote" team via @unquotenews for all the latest private equity and venture capital updates, and of course on unquote.com.

Amy King
News Editor, unquote"

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