This question was addressed by jack and Suzy Welch. Reference Mint, Campaign, 10 Dec 2007, Page C8
They say material adverse change clause is being invoked by buyers due to the credit constraints they are facing now. The MAC clause is vaguely worded and they emphasize on CEO taking interest in the contract till the last word rather than leaving it to lawyers. When stakes are high, you have no choice but to be there till the end.
Possible litigations mentioned:
Sallie Mae, Inc. vs. JC Flowers & Co., PE firm
United Rentals vs. Cerberus capital management, PE firm
Showing posts with label Private-Equity. Show all posts
Showing posts with label Private-Equity. Show all posts
Sunday, December 9, 2007
Tuesday, December 4, 2007
PE Fund proposals - India
--------------------------
ET 6-12-2007 Page 1
ICIC to raise $8 billion for PE investment
ICICI Venture will raise $5 B and ICICI Bank will raise $3 B.
ICICI Venture is already the largest Indian PE player with over $2.5 B under management. It plans to launch $2 B real estate fund and $2 B PE fund. The deal presently around $60 - 100 million will up to $200 M in the future.
ICICI bank is looking forward to a fund of funds with an initial size of around $500 million which will expand to around $2.5 B. It will also launch an infrastructure fund for $2 B.
------------------
Motilal oswal
ET 6-12-2007 Page 1
ICIC to raise $8 billion for PE investment
ICICI Venture will raise $5 B and ICICI Bank will raise $3 B.
ICICI Venture is already the largest Indian PE player with over $2.5 B under management. It plans to launch $2 B real estate fund and $2 B PE fund. The deal presently around $60 - 100 million will up to $200 M in the future.
ICICI bank is looking forward to a fund of funds with an initial size of around $500 million which will expand to around $2.5 B. It will also launch an infrastructure fund for $2 B.
------------------
Motilal oswal
Sunday, December 2, 2007
Private Equity Trends
Figures from Venture Economics suggest that between 1980 and 2000, the amount of commitments of capital to funds managed by private equity firms increased from $2.3 billion to about $177 billion, cumulatively totalling $737 billion.
Industry size
According to estimates made by Thomson Financial, 2006 was a record year for private equity in both fundraising and investments. 684 PE funds raised a record $432 billion worldwide in 2006, led by buyout and real estate funds with $213 billion and $63 billion respectively. The total value of announced private equity buyout deals hit a record $700 billion in 2006, more than double the record set in 2005 and 20 times bigger than in 1996 (Metrics 2.0 2007).
According to one study, private equity assets under management are now nearing $400 billion in the US and just under $200 billion in Europe. Private equity expansion is also reportedly strong with aggregate deal value growing at 51 per cent annually from 2001 to 2005 in North America. The largest private equity firms, such as Blackstone, the Texas Pacific Group, the Carlyle group or Kohlberg Kravis Roberts & Co., each control companies with combined net revenues that exceed most US companies. And the large volumes of committed investor capital controlled by these funds and their substantial access to bank credit make them consider and execute deals that are huge and often unprecedented. One such recent deal is the Blackstone take over, after an intense battle with Vornado Realty Trust, of Equity Office Properties (the publicly traded owner of US office towers) for $39 billion. This is reportedly the largest leveraged buyout ever.
According to Emerging Markets Private Equity Association, fundraising for emerging market private equity surged in 2005 and 2006. Estimated at $3.4 billion and $5.8 billion in 2003 and 2004, the figure shot up to 22.1 billion in 2004 and $21.9 billion in the period to November 1 during 2006. Asia (excluding Japan, Australia and New Zealand) dominated the surge, with the figure rising from $2.2 billion and $2.8 billion in 2003 and 2004 to $15.4 billion during 2005 and $14.5 billion during the first ten months of 2006 (EM PE Quarterly Review, Volume II, Issue 4 2006).
Deal making in the region has also gained momentum. Dealogic estimates that the value of private equity deals in Asia-Pacific, excluding Japan, more than tripled to $26 billion in 2006 from $7 billion in 2005 (Metrics 2.0). Private equity buyouts have accounted for 7 per cent of regional merger and acquisition volume this year, up from 3 per cent in 2005 but still below the global figure of 17 per cent.
India
See the presentation IVCA
http://www.indiavca.org/IVCA%20Presentation_October2007.pdf
Risk Capital Foundation seems to be the first VC-PE firm to start operations in India in 1975. During 1976-1995, domestic financial institutions like Industrial Finance Corporation of India (IFCI), Industrial Development Bank of India (IDBI), and Industrial Credit and Investment Corporation of India (ICICI Bank) were some of the few private organizations that provided any Venture Capital or Private Equity capital, and the actual investment made by them was also negligible. During the period 1996-2000, several international and domestic VC and PE firms raised capital internationally and started investing tiny amounts in India. For example, the total investment in India made by these firms was only US $20 million in 1996 and US $80 million in 1997.
Even though PE-VC investment was only $20 million in 1996 and $80 million in 1997, the pace of growth was very healthy largely due to the worldwide dot-com boom. Unfortunately, because this growth was driven by of the dot-com bubble, it came crashing down soon after NASDAQ lost 60% of its value in 2000 – for example, the total number of deals declined from 280 in 2000 to 110 in 2001 – and this investment reached its low point both in the number of deals and total value in 2003.
From 2003 onwards, India’s economy started growing at 8% to 9% annually in real terms and at 13% to 15% in nominal terms (including inflation), and since some sectors (e.g., the services sector and the high-end manufacturing sector) started growing at 10% to 14% a year in real terms and 15% to 20% in nominal terms, VC-PE firms started investing again in 2004. For example, they invested US $1.65 billion in 2004, surpassing the investment of $1.16 billion in 2000 by 42%.
in late 2002 Oak Hill Capital and Financial Technology Ventures resorted to a buyout deal by backing a management bid to acquire Conseco's stake in Delhi-based EXL Services. Subsequently, in September 2003, ICICI Venture bought out the Tatas' controlling stake in Tata Infomedia. Three months later, CDC Capital Partners, the UK-based private equity investor, struck a Rs 75-crore deal to buy ICI India's industrial chemicals business in Gujarat. The private equity asset class had arrived in the country.
When private equity fund Warburg Pincus LLC announced in the middle of March 2005 that it had sold a chunk of its stake in India's top cellular player, Bharti Tele-Ventures Ltd, for $560 million (the largest stock trade in India's history), it was time to sit up. Warburg Pincus had with that deal made $1.1 billion by selling off two-thirds of its 18 per cent share in Bharti, reflecting a huge payoff on a $300 million investment made in stages between 1999 and 2001.
Big deals
Since then, there has been an increase in such activity with all the majors finding their way to the country. Growth has also been substantial. The total number of M&A deals struck in 2006 was estimated at 782 ($28.2 billion) compared with 467 ($18.3 million) in 2005 (Business Line, January 7). Of these, 302 involved private equity. Private equity investments also saw substantial growth in 2006. From $1.1 billion invested in 60 deals in 2004, private equity investments rose to $2 billion in 124 deals in 2005, and a remarkable $7.9 billion in 302 deals in 2006. This remarkable 287 per cent increase in the total value of private equity during 2006, points to a growing value in each deal. There were more than 29 deals valued at over $50 million as against 10 such in 2005. The average private equity investment size increased from $16.40 million in 2005 to $26.02 million in 2006.
---------------
2006 – PE/VC Trends
US$7.5bn invested in 2006 across 299 deals.
IT & ITES retained its status as the favorite industry
among PE investors, followed by manufacturing and
real estate.
Largest PE deal was $900M LBO of Flextronics by
Kohlberg Kravis Roberts (KKR).
M&A and IPO activity continued to remain strong.
-------------------------
2007 first half
Total number of deals: 162 with total amount invested at
~ US$5.6B
----------------------------
Some of the big deals included Kohlberg Kravis Roberts & Co's $900-million investment in Flextronics Software Systems; Providence Equity Partner's $400-million investment in Idea Cellular and Temasek Holdings Pte's $330-million investment in Tata Teleservices Ltd. Such deals are continuing in 2007 with Blackstone Group acquiring a 26 per cent stake in Ushodaya Enterprises Ltd, which publishes the Telugu newspaper Eenadu and owns television channels under the same name.
India has been a hot destination even according to Venture Intelligence, a firm tracking this market in India. Private equity investment in India rose by over 230 per cent in 2006, to $7.46 billion, up from $2.26 billion a year earlier. And the trend seems to be continuing. Private equity investments are estimated to have doubled in the January-March quarter with firms such as Goldman Sachs and 3i investing large sums in Indian companies. Private equity firms invested $2.5 billion in the first quarter of 2007, up from $1.27 billion a year earlier, according data recently released by Venture Intelligence. Private equity investment in India is expected to touch about $10 billion in 2007, from $7.46 billion in 2006 which was more than triple of $2.26 billion invested in 2005.
---------------------
Venture Capital Investment in India reached $777 Million in 2007
Venture capitalists invested more than $777 million in 57 deals for entrepreneurial companies in India during the first three quarters of 2007, according to the Quarterly India Venture Capital Report published for the first time today by Dow Jones VentureOne and Ernst & Young. This was nearly five times the $158 million invested during the first nine months of 2006 and more than twice the annual investment record of $320 million set in 2005. The report covers venture capital investment specifically, which Dow Jones VentureOne defines as growth capital made available to entrepreneurial companies in exchange for ownership in the form of private securities. These investments are often seen as shorter-term and do not include private equity investments such as leveraged buyouts or mezzanine and debt financing. The report showed 54% of all venture deals in India were for companies in the Information Technology (IT) categories, accounting for more than $327 million worth of investment.
-----------------------
http://www.thehindubusinessline.com/2007/05/01/stories/2007050100040900.htm
http://www.sandhill.com/opinion/daily_blog.php?id=49
http://www.indiavca.org/
http://www.indiape.com/
Industry size
According to estimates made by Thomson Financial, 2006 was a record year for private equity in both fundraising and investments. 684 PE funds raised a record $432 billion worldwide in 2006, led by buyout and real estate funds with $213 billion and $63 billion respectively. The total value of announced private equity buyout deals hit a record $700 billion in 2006, more than double the record set in 2005 and 20 times bigger than in 1996 (Metrics 2.0 2007).
According to one study, private equity assets under management are now nearing $400 billion in the US and just under $200 billion in Europe. Private equity expansion is also reportedly strong with aggregate deal value growing at 51 per cent annually from 2001 to 2005 in North America. The largest private equity firms, such as Blackstone, the Texas Pacific Group, the Carlyle group or Kohlberg Kravis Roberts & Co., each control companies with combined net revenues that exceed most US companies. And the large volumes of committed investor capital controlled by these funds and their substantial access to bank credit make them consider and execute deals that are huge and often unprecedented. One such recent deal is the Blackstone take over, after an intense battle with Vornado Realty Trust, of Equity Office Properties (the publicly traded owner of US office towers) for $39 billion. This is reportedly the largest leveraged buyout ever.
According to Emerging Markets Private Equity Association, fundraising for emerging market private equity surged in 2005 and 2006. Estimated at $3.4 billion and $5.8 billion in 2003 and 2004, the figure shot up to 22.1 billion in 2004 and $21.9 billion in the period to November 1 during 2006. Asia (excluding Japan, Australia and New Zealand) dominated the surge, with the figure rising from $2.2 billion and $2.8 billion in 2003 and 2004 to $15.4 billion during 2005 and $14.5 billion during the first ten months of 2006 (EM PE Quarterly Review, Volume II, Issue 4 2006).
Deal making in the region has also gained momentum. Dealogic estimates that the value of private equity deals in Asia-Pacific, excluding Japan, more than tripled to $26 billion in 2006 from $7 billion in 2005 (Metrics 2.0). Private equity buyouts have accounted for 7 per cent of regional merger and acquisition volume this year, up from 3 per cent in 2005 but still below the global figure of 17 per cent.
India
See the presentation IVCA
http://www.indiavca.org/IVCA%20Presentation_October2007.pdf
Risk Capital Foundation seems to be the first VC-PE firm to start operations in India in 1975. During 1976-1995, domestic financial institutions like Industrial Finance Corporation of India (IFCI), Industrial Development Bank of India (IDBI), and Industrial Credit and Investment Corporation of India (ICICI Bank) were some of the few private organizations that provided any Venture Capital or Private Equity capital, and the actual investment made by them was also negligible. During the period 1996-2000, several international and domestic VC and PE firms raised capital internationally and started investing tiny amounts in India. For example, the total investment in India made by these firms was only US $20 million in 1996 and US $80 million in 1997.
Even though PE-VC investment was only $20 million in 1996 and $80 million in 1997, the pace of growth was very healthy largely due to the worldwide dot-com boom. Unfortunately, because this growth was driven by of the dot-com bubble, it came crashing down soon after NASDAQ lost 60% of its value in 2000 – for example, the total number of deals declined from 280 in 2000 to 110 in 2001 – and this investment reached its low point both in the number of deals and total value in 2003.
From 2003 onwards, India’s economy started growing at 8% to 9% annually in real terms and at 13% to 15% in nominal terms (including inflation), and since some sectors (e.g., the services sector and the high-end manufacturing sector) started growing at 10% to 14% a year in real terms and 15% to 20% in nominal terms, VC-PE firms started investing again in 2004. For example, they invested US $1.65 billion in 2004, surpassing the investment of $1.16 billion in 2000 by 42%.
in late 2002 Oak Hill Capital and Financial Technology Ventures resorted to a buyout deal by backing a management bid to acquire Conseco's stake in Delhi-based EXL Services. Subsequently, in September 2003, ICICI Venture bought out the Tatas' controlling stake in Tata Infomedia. Three months later, CDC Capital Partners, the UK-based private equity investor, struck a Rs 75-crore deal to buy ICI India's industrial chemicals business in Gujarat. The private equity asset class had arrived in the country.
When private equity fund Warburg Pincus LLC announced in the middle of March 2005 that it had sold a chunk of its stake in India's top cellular player, Bharti Tele-Ventures Ltd, for $560 million (the largest stock trade in India's history), it was time to sit up. Warburg Pincus had with that deal made $1.1 billion by selling off two-thirds of its 18 per cent share in Bharti, reflecting a huge payoff on a $300 million investment made in stages between 1999 and 2001.
Big deals
Since then, there has been an increase in such activity with all the majors finding their way to the country. Growth has also been substantial. The total number of M&A deals struck in 2006 was estimated at 782 ($28.2 billion) compared with 467 ($18.3 million) in 2005 (Business Line, January 7). Of these, 302 involved private equity. Private equity investments also saw substantial growth in 2006. From $1.1 billion invested in 60 deals in 2004, private equity investments rose to $2 billion in 124 deals in 2005, and a remarkable $7.9 billion in 302 deals in 2006. This remarkable 287 per cent increase in the total value of private equity during 2006, points to a growing value in each deal. There were more than 29 deals valued at over $50 million as against 10 such in 2005. The average private equity investment size increased from $16.40 million in 2005 to $26.02 million in 2006.
---------------
2006 – PE/VC Trends
US$7.5bn invested in 2006 across 299 deals.
IT & ITES retained its status as the favorite industry
among PE investors, followed by manufacturing and
real estate.
Largest PE deal was $900M LBO of Flextronics by
Kohlberg Kravis Roberts (KKR).
M&A and IPO activity continued to remain strong.
-------------------------
2007 first half
Total number of deals: 162 with total amount invested at
~ US$5.6B
----------------------------
Some of the big deals included Kohlberg Kravis Roberts & Co's $900-million investment in Flextronics Software Systems; Providence Equity Partner's $400-million investment in Idea Cellular and Temasek Holdings Pte's $330-million investment in Tata Teleservices Ltd. Such deals are continuing in 2007 with Blackstone Group acquiring a 26 per cent stake in Ushodaya Enterprises Ltd, which publishes the Telugu newspaper Eenadu and owns television channels under the same name.
India has been a hot destination even according to Venture Intelligence, a firm tracking this market in India. Private equity investment in India rose by over 230 per cent in 2006, to $7.46 billion, up from $2.26 billion a year earlier. And the trend seems to be continuing. Private equity investments are estimated to have doubled in the January-March quarter with firms such as Goldman Sachs and 3i investing large sums in Indian companies. Private equity firms invested $2.5 billion in the first quarter of 2007, up from $1.27 billion a year earlier, according data recently released by Venture Intelligence. Private equity investment in India is expected to touch about $10 billion in 2007, from $7.46 billion in 2006 which was more than triple of $2.26 billion invested in 2005.
---------------------
Venture Capital Investment in India reached $777 Million in 2007
Venture capitalists invested more than $777 million in 57 deals for entrepreneurial companies in India during the first three quarters of 2007, according to the Quarterly India Venture Capital Report published for the first time today by Dow Jones VentureOne and Ernst & Young. This was nearly five times the $158 million invested during the first nine months of 2006 and more than twice the annual investment record of $320 million set in 2005. The report covers venture capital investment specifically, which Dow Jones VentureOne defines as growth capital made available to entrepreneurial companies in exchange for ownership in the form of private securities. These investments are often seen as shorter-term and do not include private equity investments such as leveraged buyouts or mezzanine and debt financing. The report showed 54% of all venture deals in India were for companies in the Information Technology (IT) categories, accounting for more than $327 million worth of investment.
-----------------------
http://www.thehindubusinessline.com/2007/05/01/stories/2007050100040900.htm
http://www.sandhill.com/opinion/daily_blog.php?id=49
http://www.indiavca.org/
http://www.indiape.com/
PE Firms Salary and Bonuses 2006
Position ----------Base---------Bonus
Analyst---------$100K---------$100-125K
(2nd year)
Associate--------100-125------ 200-250
(2nd year)
VP---------------150-200------750
Director----------200 --------1-1.5 million
MD/Partner-------200-250------3-5 million
----------------
http://www.metrics2.com/blog/2007/03/23/private_equity_bonus_scorecard_2006_dealmaker.html
Analyst---------$100K---------$100-125K
(2nd year)
Associate--------100-125------ 200-250
(2nd year)
VP---------------150-200------750
Director----------200 --------1-1.5 million
MD/Partner-------200-250------3-5 million
----------------
http://www.metrics2.com/blog/2007/03/23/private_equity_bonus_scorecard_2006_dealmaker.html
PE - IL&FS
IL&FS Investment Managers Limited (IIML) is the private equity investment arm of IL&FS. IIML manages a host of private equity/ venture capital funds structured across business verticals funding varied stages of business cycles. IIML believes in working actively with entrepreneurs and management teams towards a common goal viz. building sustainable business and delivering market superior returns for its investors
The IL&FS Group offers robust equity fund management services, with investments across Infrastructure, Manufacturing, Technology, Life Sciences and Consumer Services.
http://www.ilfsindia.com/services.asp?parent_id=2&offering_id=15&child_id=
--------------------
IL&FS Investment Managers Limited (IIML) is one of India's largest domestic private equity fund management companies with over US$ 1 billion under management on behalf of leading Indian and International Institutions. IIML has been an active investor in the Indian market since 1997 with aggregate investment experience spanning over a decade and access across industry sectors. IIML's experience covers the entire Private Equity lifecycle ? right from raising funds, making and planning investments to restructuring and exits. IIML manages a number of Funds, which are invested across a variety of sectors including Infrastructure, Technology, Media, Retail, Consumer Services, Manufacturing and Real Estate. The IIML business model and investment processes have been structured in line with global standards and it has an established financial track record
IIML's principal objective is to deliver 'market superior' returns. IIML's investment thesis and planned approach is essentially built upon the following key elements:
Invest in demonstrated and sustainable competitive advantage
Back management teams with a track record or those that exhibit abilities to successfully lead and build dominant companies
Structuring to minimise risk and maximise returns
Continuously evaluate and re-examine exit strategies
Leverage proprietary deal flow
IIML is an active investor, seeking significant ownership positions and involvement. IIML works with the management of portfolio companies to supplement operational and strategic planning.
IIML has developed an extensive proprietary network that provides a substantial source of deal flow and informed insights into the Indian investment environment
http://www.ilfsindia.com/group_co.asp?gmchild=9
The IL&FS Group offers robust equity fund management services, with investments across Infrastructure, Manufacturing, Technology, Life Sciences and Consumer Services.
http://www.ilfsindia.com/services.asp?parent_id=2&offering_id=15&child_id=
--------------------
IL&FS Investment Managers Limited (IIML) is one of India's largest domestic private equity fund management companies with over US$ 1 billion under management on behalf of leading Indian and International Institutions. IIML has been an active investor in the Indian market since 1997 with aggregate investment experience spanning over a decade and access across industry sectors. IIML's experience covers the entire Private Equity lifecycle ? right from raising funds, making and planning investments to restructuring and exits. IIML manages a number of Funds, which are invested across a variety of sectors including Infrastructure, Technology, Media, Retail, Consumer Services, Manufacturing and Real Estate. The IIML business model and investment processes have been structured in line with global standards and it has an established financial track record
IIML's principal objective is to deliver 'market superior' returns. IIML's investment thesis and planned approach is essentially built upon the following key elements:
Invest in demonstrated and sustainable competitive advantage
Back management teams with a track record or those that exhibit abilities to successfully lead and build dominant companies
Structuring to minimise risk and maximise returns
Continuously evaluate and re-examine exit strategies
Leverage proprietary deal flow
IIML is an active investor, seeking significant ownership positions and involvement. IIML works with the management of portfolio companies to supplement operational and strategic planning.
IIML has developed an extensive proprietary network that provides a substantial source of deal flow and informed insights into the Indian investment environment
http://www.ilfsindia.com/group_co.asp?gmchild=9
PE - Edelweiss - India
Private Equity Advisory
A pioneer in Private Equity advisory since its inception 11 years ago with an established leadership position in today's context.
We have been a leading Private Equity advisor for over a decade and have developed a strong expertise across industries which enable us to recognize emerging industry themes and position transactions within the context. Our strength in Private Equity advisory stems from:
Long standing relationships with marquee PE funds - Access to key decision makers at PE funds gives us an unparalleled edge in optimal structuring and efficient closure of transactions.
High quality execution - An experienced team of professionals ensures complete confidentiality, strong focus on implementation and quick turnaround time.
Focus on long term relationships - In addition to handholding the client across the entire transaction process, we provide continued support post-transaction and have the capability to cater to investment banking needs of the client throughout his business lifecycle.
Having achieved a leadership position in the Private Equity advisory market, we believe that we are ideally placed to advise promoters and companies on the key considerations in a PE fund raising exercise.
http://www.edelcap.com/InvestMentBanking/TombStones.aspx?SubReportID=bddc6477-522c-4095-a67e-9134ba02f8db
-----------
A pioneer in Private Equity advisory since its inception 11 years ago with an established leadership position in today's context.
We have been a leading Private Equity advisor for over a decade and have developed a strong expertise across industries which enable us to recognize emerging industry themes and position transactions within the context. Our strength in Private Equity advisory stems from:
Long standing relationships with marquee PE funds - Access to key decision makers at PE funds gives us an unparalleled edge in optimal structuring and efficient closure of transactions.
High quality execution - An experienced team of professionals ensures complete confidentiality, strong focus on implementation and quick turnaround time.
Focus on long term relationships - In addition to handholding the client across the entire transaction process, we provide continued support post-transaction and have the capability to cater to investment banking needs of the client throughout his business lifecycle.
Having achieved a leadership position in the Private Equity advisory market, we believe that we are ideally placed to advise promoters and companies on the key considerations in a PE fund raising exercise.
http://www.edelcap.com/InvestMentBanking/TombStones.aspx?SubReportID=bddc6477-522c-4095-a67e-9134ba02f8db
-----------
Private Equity -Axis Bank - India
Private Equity
We provide complete advisory solutions to mid-cap and large companies in their growth journey by way of arranging private equity funds for them. Our focus pertains to sectors ranging from Auto Ancillary, Textiles, Cement, Logistics, Infrastructure, Real Estate, Banking and Financial Services, Media, Steel, Power, Pharmaceuticals, Technology, etc. to name a few. We share good relations with all the large and mid-size private equity funds as well as sector specific funds those are active in India. This enables us to have a competitive edge in closing Private Equity transactions in a speedy manner.
Mergers and Acquisition Services
We identify, devise and execute innovative and customized solutions to our clients' challenging requirements. We create value proposition for our clients not just to make the deal through, but also to help them reap full benefits of M&A to make their business grow. We work on domestic and international transactions including acquisitions, divestitures, mergers, joint ventures, corporate restructurings, spin-offs and leveraged buyouts.
http://www.axisbank.com/corporate/capitalmarkets/privateequity/Private-Equity.asp
Private Equity, Mergers & Acquisitions:
Contact Details
Mumbai Sr. Vice President - Capital Markets
Phone +91- 22 - 2216 2684 / 22161341 / 6707 1312
Fax +91- 22 - 2216 2467 / 6707 1264
E-mail utibmbd@axisbank.com
New Delhi Asst. Vice President - Capital Markets
Phone +91- 11 - 2335 9931/5, 4151 5450
Fax +91- 11 - 4151 5449
E-mail utibmbd@axisbank.com
Hyderabad / Chennai / Bangalore Vice President - Capital Markets
Phone +91- 40 - 5566 9825 / 2340 5182
Fax +91- 40 - 2340 7184
E-mail utibmbd@axisbank.com
Kolkata Asst. Vice President - Capital Markets
Phone +91- 33 - 22 82 4973 / 2282 2149
Fax +91- 33 - 2282 / 1727
E-mail utibmbd@axisbank.com
We provide complete advisory solutions to mid-cap and large companies in their growth journey by way of arranging private equity funds for them. Our focus pertains to sectors ranging from Auto Ancillary, Textiles, Cement, Logistics, Infrastructure, Real Estate, Banking and Financial Services, Media, Steel, Power, Pharmaceuticals, Technology, etc. to name a few. We share good relations with all the large and mid-size private equity funds as well as sector specific funds those are active in India. This enables us to have a competitive edge in closing Private Equity transactions in a speedy manner.
Mergers and Acquisition Services
We identify, devise and execute innovative and customized solutions to our clients' challenging requirements. We create value proposition for our clients not just to make the deal through, but also to help them reap full benefits of M&A to make their business grow. We work on domestic and international transactions including acquisitions, divestitures, mergers, joint ventures, corporate restructurings, spin-offs and leveraged buyouts.
http://www.axisbank.com/corporate/capitalmarkets/privateequity/Private-Equity.asp
Private Equity, Mergers & Acquisitions:
Contact Details
Mumbai Sr. Vice President - Capital Markets
Phone +91- 22 - 2216 2684 / 22161341 / 6707 1312
Fax +91- 22 - 2216 2467 / 6707 1264
E-mail utibmbd@axisbank.com
New Delhi Asst. Vice President - Capital Markets
Phone +91- 11 - 2335 9931/5, 4151 5450
Fax +91- 11 - 4151 5449
E-mail utibmbd@axisbank.com
Hyderabad / Chennai / Bangalore Vice President - Capital Markets
Phone +91- 40 - 5566 9825 / 2340 5182
Fax +91- 40 - 2340 7184
E-mail utibmbd@axisbank.com
Kolkata Asst. Vice President - Capital Markets
Phone +91- 33 - 22 82 4973 / 2282 2149
Fax +91- 33 - 2282 / 1727
E-mail utibmbd@axisbank.com
Private Equity - Kotak - India
INTRODUCTION
Kotak Private Equity Group (KPEG) is a specialist Private Equity arm of Kotak Mahindra Bank. We are a leading Private Equity Fund Manager focused on helping emerging corporates and mid-size enterprises evolve into tomorrow's industry leaders. KPEG provides these companies a combination of equity capital, strategic support and other value added services, playing a pro-active role with the entrepreneur in building the business.
We invest in companies across a broad range of industries seeking capital for business expansions, acquisition financing and buyout transactions. The size of our initial investment is typically between USD 10 mn and 30 mn depending on the nature of the company's business, stage of growth and its financing requirements. We also lead transactions greater than USD 30 mn through co-investment from our reputed Limited Partners, Kotak's international relationships and/or other Private Equity Funds.
While the Kotak Group has been associated with Private Equity investments since 1997, to bring a sharper focus to the Group's Alternate Assets strategy, Kotak Mahindra Bank initiated its first structured third party Private Equity Fund in early 2005. Since then, the Alternate Assets business of the Group has grown to over USD 1.0 billion under management across two asset classes namely – Private Equity & Real Estate, both led by independent investment teams.
The Alternate Assets business currently consisting of Private Equity and Real Estate has since been restructured under Kotak Investment Advisors Ltd (“KIAL”), a subsidiary of Kotak Mahindra Bank, set up to focus exclusively on managing the Alternate Assets business of the Kotak Group. As part of KIAL, KPEG currently manages / advises two funds across two strategies – Growth Capital (India Growth Fund) and Venture Capital for Life Sciences (Kotak India Venture Fund – I).
KPEG is led by Nitin Deshmukh, Group Head - Private Equity who has put together an experienced investment team with a successful track record in venture capital / private equity investments. The other partners in the team are K.V. Ramakrishna and Vamesh Chovatia. The three partners of the Fund collectively bring in over 55 years of industry and private equity investment experience with strong deal origination and networking capabilities.
Additionally, the investment team consists of five professionals including three Vice Presidents and two Associate Vice Presidents having varied and complimentary skill sets. All of these investment professionals have prior operating, consulting, project finance and investment experience across various industries.
Complementing the investment team is a Business Strategy team led by Vivek Joshi, who has over 17 years of operating experience in senior positions across large domestic and global organizations. This team is focused on working closely with portfolio companies to facilitate implementation of effective operational and marketing strategies.
Together, the members of KPEG combine the technical expertise, operating experience and financial acumen needed to be active investors. The team has a history of helping build companies not only with capital but also with close personal involvement as board members, advisors, strategists and fund-raisers.
Investment Team
Nitin Deshmukh, Head - Private Equity
nitin.deshmukh@kotak.com
Ramakrishna K. V.
ramakrishna.kv@kotak.com
Vamesh Chovatia
vamesh.chovatia@kotak.com
Satish Kumar Chaluvadi
satish.chaluvadi@kotak.com
Shrikant Bahadkar
shrikant.bahadkar@kotak.com
Vivek Joshi
vivekn.joshi@kotak.com
http://www.kotak.com/Kotak_GroupSite/groupcos/pvt_invt_team.htm
Kotak Private Equity Group (KPEG) is a specialist Private Equity arm of Kotak Mahindra Bank. We are a leading Private Equity Fund Manager focused on helping emerging corporates and mid-size enterprises evolve into tomorrow's industry leaders. KPEG provides these companies a combination of equity capital, strategic support and other value added services, playing a pro-active role with the entrepreneur in building the business.
We invest in companies across a broad range of industries seeking capital for business expansions, acquisition financing and buyout transactions. The size of our initial investment is typically between USD 10 mn and 30 mn depending on the nature of the company's business, stage of growth and its financing requirements. We also lead transactions greater than USD 30 mn through co-investment from our reputed Limited Partners, Kotak's international relationships and/or other Private Equity Funds.
While the Kotak Group has been associated with Private Equity investments since 1997, to bring a sharper focus to the Group's Alternate Assets strategy, Kotak Mahindra Bank initiated its first structured third party Private Equity Fund in early 2005. Since then, the Alternate Assets business of the Group has grown to over USD 1.0 billion under management across two asset classes namely – Private Equity & Real Estate, both led by independent investment teams.
The Alternate Assets business currently consisting of Private Equity and Real Estate has since been restructured under Kotak Investment Advisors Ltd (“KIAL”), a subsidiary of Kotak Mahindra Bank, set up to focus exclusively on managing the Alternate Assets business of the Kotak Group. As part of KIAL, KPEG currently manages / advises two funds across two strategies – Growth Capital (India Growth Fund) and Venture Capital for Life Sciences (Kotak India Venture Fund – I).
KPEG is led by Nitin Deshmukh, Group Head - Private Equity who has put together an experienced investment team with a successful track record in venture capital / private equity investments. The other partners in the team are K.V. Ramakrishna and Vamesh Chovatia. The three partners of the Fund collectively bring in over 55 years of industry and private equity investment experience with strong deal origination and networking capabilities.
Additionally, the investment team consists of five professionals including three Vice Presidents and two Associate Vice Presidents having varied and complimentary skill sets. All of these investment professionals have prior operating, consulting, project finance and investment experience across various industries.
Complementing the investment team is a Business Strategy team led by Vivek Joshi, who has over 17 years of operating experience in senior positions across large domestic and global organizations. This team is focused on working closely with portfolio companies to facilitate implementation of effective operational and marketing strategies.
Together, the members of KPEG combine the technical expertise, operating experience and financial acumen needed to be active investors. The team has a history of helping build companies not only with capital but also with close personal involvement as board members, advisors, strategists and fund-raisers.
Investment Team
Nitin Deshmukh, Head - Private Equity
nitin.deshmukh@kotak.com
Ramakrishna K. V.
ramakrishna.kv@kotak.com
Vamesh Chovatia
vamesh.chovatia@kotak.com
Satish Kumar Chaluvadi
satish.chaluvadi@kotak.com
Shrikant Bahadkar
shrikant.bahadkar@kotak.com
Vivek Joshi
vivekn.joshi@kotak.com
http://www.kotak.com/Kotak_GroupSite/groupcos/pvt_invt_team.htm
Private Equity - Motilal Oswal
Overview
Motilal Oswal Financial Services has launched the India Business Excellence Fund (IBEF), a US$ 100 mn India focused Private Equity Fund.
IBEF will be managed by Motilal Oswal Venture Capital Advisors Private Limited (MOVCAPL), a wholly owned subsidiary of Motilal Oswal Financial Services Ltd. IBEF will have an investment focus of providing growth capital to Small & Medium Enterprises (SME) typically in the range of US$ 3 - 7 million. The favourable macroeconomic environment in the country is helping SMEs to flourish. A surge in the economic activity in this segment is driven by the network effect of a variety of positive macroeconomic factors, thereby creating a growing entrepreneurial base in India. However, their is a huge unserviced demand for private capital amongst SMEs to support emergence of new sectors and growth of existing sectors.
IBEF will provide growth capital to emerging SMEs across all sectors, having at least the following characteristics among other things:
Sustainable competitive advantage;
Dynamic and credible management team;
Proven track record;
Stable and consistent cash-flows;
Potential to generate significant upside at the time of exit;
MOVCAPL believes that with the right strategy, management and operational assistance, IBEF's portfoliio companies will be able to leverage their existing market position and create significant value over a period of 3-5 years.
Over the last 20 years, MOFSL has been successful in building a comprehensive equity research team, vast distribution network, and deep corporate and institutional relationships. These coupled with the experience of successfully managing a business will be leveraged by IBEF to become a financial investor of choice for companies looking for private equity investments.
---------------------
Motilal Oswal Venture Capital Advisors Ltd. (‘Motilal Oswal VC’). is the latest that is capturing opportunities arising from this infrastructure investment boom. Motilal Oswal VC committed 190 million rupees to IMP Powers Ltd., which is a power equipment maker. One of the oldest names in India’s power equipment making industry, IMP Power products include various types of transformers, industrial metres and testing equipment.
http://www.asiape.com/aper/aper_issues/aper0710.html
------------
Motilal Oswal Financial Services has launched the India Business Excellence Fund (IBEF), a US$ 100 mn India focused Private Equity Fund.
IBEF will be managed by Motilal Oswal Venture Capital Advisors Private Limited (MOVCAPL), a wholly owned subsidiary of Motilal Oswal Financial Services Ltd. IBEF will have an investment focus of providing growth capital to Small & Medium Enterprises (SME) typically in the range of US$ 3 - 7 million. The favourable macroeconomic environment in the country is helping SMEs to flourish. A surge in the economic activity in this segment is driven by the network effect of a variety of positive macroeconomic factors, thereby creating a growing entrepreneurial base in India. However, their is a huge unserviced demand for private capital amongst SMEs to support emergence of new sectors and growth of existing sectors.
IBEF will provide growth capital to emerging SMEs across all sectors, having at least the following characteristics among other things:
Sustainable competitive advantage;
Dynamic and credible management team;
Proven track record;
Stable and consistent cash-flows;
Potential to generate significant upside at the time of exit;
MOVCAPL believes that with the right strategy, management and operational assistance, IBEF's portfoliio companies will be able to leverage their existing market position and create significant value over a period of 3-5 years.
Over the last 20 years, MOFSL has been successful in building a comprehensive equity research team, vast distribution network, and deep corporate and institutional relationships. These coupled with the experience of successfully managing a business will be leveraged by IBEF to become a financial investor of choice for companies looking for private equity investments.
---------------------
Motilal Oswal Venture Capital Advisors Ltd. (‘Motilal Oswal VC’). is the latest that is capturing opportunities arising from this infrastructure investment boom. Motilal Oswal VC committed 190 million rupees to IMP Powers Ltd., which is a power equipment maker. One of the oldest names in India’s power equipment making industry, IMP Power products include various types of transformers, industrial metres and testing equipment.
http://www.asiape.com/aper/aper_issues/aper0710.html
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PE - India - Religare
May 2006
With the aim of bringing investment into "under-represented" growth opportunities in India, financial services provider Religare has joined hands with US-based investment firm Evercore Partners to set up a $150 million private equity fund.
The fund, christened ER Capital India Fund, targets India-based high-growth and mid-sized private equity investment opportunities in segments such as healthcare, retail, financial services, manufacturing, auto-components and infrastructure in tier II and III cities.
Religare is wholly-owned by the promoter-family of Ranbaxy and marks the third area that the Ranbaxy group has got into. Pharmaceuticals and healthcare, through Fortis Healthcare, being the two other areas that Ranbaxy is strongly entrenched into.
The new private equity fund will start with a capital commitment of $20 million from Evercore and the rest would be raised from S.E.Asia, Europe and West Asia by August 2006. Religare's Chief Executive Officer and Managing Director is Mr Sunil Godhwani. It is a dollar-denominated fund targeting investors overseas and the revenues would be shared equally between the two sponsor companies.
The fund would look at investment opportunities in small and medium enterprises in segments that are under-represented in the stock exchange but have growth potential. The fund would look at deals of $10-20 million and targets funding about 14 companies this year. The commitment would be for a period of four years.
Mr Shivinder Mohan Singh, Director-Religare and Managing Director of Fortis Healthcare, said that fund would provide India-centric funds to individuals, corporates and expatriates abroad. A fund for Indian investors may be on the anvil at a later date. Stressing the potential of the financial services sector, he said, it goes beyond the Sensex that has been rather volatile in the last few days.
http://www.thehindubusinessline.com/2006/05/26/stories/2006052603121900.htm
With the aim of bringing investment into "under-represented" growth opportunities in India, financial services provider Religare has joined hands with US-based investment firm Evercore Partners to set up a $150 million private equity fund.
The fund, christened ER Capital India Fund, targets India-based high-growth and mid-sized private equity investment opportunities in segments such as healthcare, retail, financial services, manufacturing, auto-components and infrastructure in tier II and III cities.
Religare is wholly-owned by the promoter-family of Ranbaxy and marks the third area that the Ranbaxy group has got into. Pharmaceuticals and healthcare, through Fortis Healthcare, being the two other areas that Ranbaxy is strongly entrenched into.
The new private equity fund will start with a capital commitment of $20 million from Evercore and the rest would be raised from S.E.Asia, Europe and West Asia by August 2006. Religare's Chief Executive Officer and Managing Director is Mr Sunil Godhwani. It is a dollar-denominated fund targeting investors overseas and the revenues would be shared equally between the two sponsor companies.
The fund would look at investment opportunities in small and medium enterprises in segments that are under-represented in the stock exchange but have growth potential. The fund would look at deals of $10-20 million and targets funding about 14 companies this year. The commitment would be for a period of four years.
Mr Shivinder Mohan Singh, Director-Religare and Managing Director of Fortis Healthcare, said that fund would provide India-centric funds to individuals, corporates and expatriates abroad. A fund for Indian investors may be on the anvil at a later date. Stressing the potential of the financial services sector, he said, it goes beyond the Sensex that has been rather volatile in the last few days.
http://www.thehindubusinessline.com/2006/05/26/stories/2006052603121900.htm
Private Equity - Business concept
The Private equity investing is broadly defined as investing in a company through a negotiated process. PE investments can be divided into the two following major categories:
Venture capital: an investment to create a new company, or expand a smaller company that has undeveloped or developing revenues
Buy-out: acquisition of a significant portion or a majority control in a more mature company. The acquisition normally entails a change of ownership
Private equity firms exit from their investments through one of three ways:
an IPO,
a sale or merger of the company,
or a recapitalization.
Leading investment are committing their own capital or principal money to PE investments. Also various sponsors are floating PE funds to attaract funds from HNIs into PE investments.
Most private equity funds require significant initial investment (usually upwards of $1,000,000) plus further investment for the first few years of the fund.
Limited partnership interests is the dominant legal form of private equity investments.
Once invested, money is locked-up in long-term investments which can last for as long as twelve years. Distributions are made only as investments are converted to cash; limited partners typically have no right to demand that sales be made.
If a private equity firm can't find good investment opportunities, it will not draw on an investor's commitment.
The risk of loss of capital is typically higher in venture capital funds, which invest in companies during the earliest phases of their development, and lower in mezzanine capital funds, which provide interim investments to companies which have already proven their viability but have yet to raise money from public markets.
Consistent with the risks outlined above, private equity can provide high returns, with the best private equity managers significantly outperforming the public markets.
The potential benefits of annual returns can range up to 30% for successful funds.
PE Roots
The roots of PE and venture capital are same. In 1946 when the American Research and Development Corporation (ARD) decided to form to encourage private sector institutions to help provide funding for soldiers that were returning from World War II. They had an operating philosophy that was to become significant in the development of both private equity and venture capital: they believed that by providing management with skills and funding, they could encourage companies to succeed and in doing so, make a profit themselves. ARD succeeded in raising approximately $7.4 million, and they did have one rousing success; they funded Digital Equipment Corporation (DEC). By the 1970s such private participation had permeated into the the private enterprise formation, but till in the late 1970s, the task was being largely carried out by investment arms of a few wealthy families, such as the Rockefellers and Whitneys. In the 1980’s, FedEx and Apple were able to grow because of private equity or venture funding, as were Cisco, Genentech, Microsoft, Avis, Beatrice Foods, Dr. Pepper, Gibson Greetings, and McCall Patterns.
Most private equity funds are offered only to institutional investors and individuals of substantial net worth. This is often required by the law as well, since private equity funds are generally less regulated than ordinary mutual funds. For example in the US, most funds require potential investors to qualify as accredited investors, which requires $1 million of net worth, $200,000 of individual income, or $300,000 of joint income (with spouse) for two documented years and an expectation that such income level will continue.
Private Equity Funds: Business Structure and Operations By James M. Schell
Published 1999
Law Journal Press
Gives attorneys, investment professionals, tax practitioners, and corporate lawyers the tools and guidance needed to handle various aspects of a private investment fund. This book covers a range of issues such as the key economic differences between various types of funds; nailing down maximum tax benefits for the sponsor of the fund; and more.
Venture capital: an investment to create a new company, or expand a smaller company that has undeveloped or developing revenues
Buy-out: acquisition of a significant portion or a majority control in a more mature company. The acquisition normally entails a change of ownership
Private equity firms exit from their investments through one of three ways:
an IPO,
a sale or merger of the company,
or a recapitalization.
Leading investment are committing their own capital or principal money to PE investments. Also various sponsors are floating PE funds to attaract funds from HNIs into PE investments.
Most private equity funds require significant initial investment (usually upwards of $1,000,000) plus further investment for the first few years of the fund.
Limited partnership interests is the dominant legal form of private equity investments.
Once invested, money is locked-up in long-term investments which can last for as long as twelve years. Distributions are made only as investments are converted to cash; limited partners typically have no right to demand that sales be made.
If a private equity firm can't find good investment opportunities, it will not draw on an investor's commitment.
The risk of loss of capital is typically higher in venture capital funds, which invest in companies during the earliest phases of their development, and lower in mezzanine capital funds, which provide interim investments to companies which have already proven their viability but have yet to raise money from public markets.
Consistent with the risks outlined above, private equity can provide high returns, with the best private equity managers significantly outperforming the public markets.
The potential benefits of annual returns can range up to 30% for successful funds.
PE Roots
The roots of PE and venture capital are same. In 1946 when the American Research and Development Corporation (ARD) decided to form to encourage private sector institutions to help provide funding for soldiers that were returning from World War II. They had an operating philosophy that was to become significant in the development of both private equity and venture capital: they believed that by providing management with skills and funding, they could encourage companies to succeed and in doing so, make a profit themselves. ARD succeeded in raising approximately $7.4 million, and they did have one rousing success; they funded Digital Equipment Corporation (DEC). By the 1970s such private participation had permeated into the the private enterprise formation, but till in the late 1970s, the task was being largely carried out by investment arms of a few wealthy families, such as the Rockefellers and Whitneys. In the 1980’s, FedEx and Apple were able to grow because of private equity or venture funding, as were Cisco, Genentech, Microsoft, Avis, Beatrice Foods, Dr. Pepper, Gibson Greetings, and McCall Patterns.
Most private equity funds are offered only to institutional investors and individuals of substantial net worth. This is often required by the law as well, since private equity funds are generally less regulated than ordinary mutual funds. For example in the US, most funds require potential investors to qualify as accredited investors, which requires $1 million of net worth, $200,000 of individual income, or $300,000 of joint income (with spouse) for two documented years and an expectation that such income level will continue.
Private Equity Funds: Business Structure and Operations By James M. Schell
Published 1999
Law Journal Press
Gives attorneys, investment professionals, tax practitioners, and corporate lawyers the tools and guidance needed to handle various aspects of a private investment fund. This book covers a range of issues such as the key economic differences between various types of funds; nailing down maximum tax benefits for the sponsor of the fund; and more.
Private Equity - Blackstone
Overview
Our corporate private equity operation, established in 1987, is a global business with 94 investment professionals and offices in New York, London, Mumbai and Hong Kong. We are a world leader in private equity investing, having managed five general private equity funds as well as one specialized fund focusing on communications-related investments. From an operation focused in our early years on consummating leveraged buyout acquisitions of U.S.-based companies, we have grown into a business pursuing transactions throughout the world and executing not only typical leveraged buyout acquisitions of seasoned companies but also transactions involving start-up businesses in established industries, turnarounds, minority investments, corporate partnerships and industry consolidations, in all cases in strictly friendly transactions supported by the subject company's board of directors. In total, our corporate private equity operation has raised approximately $36 billion in capital since 1987. As of June 30, 2007, our corporate private equity operation had approximately $31.8 billion of assets under management.
From 1987 through June 30, 2007, our corporate private equity funds have invested in approximately 113 companies in a variety of industries and geographies in pursuit of their investment objectives. The total enterprise value of all transactions effected by our corporate private equity operations through June 30, 2007 was over $199 billion. As of June 30, 2007, our corporate private equity funds had significant equity investments in 44 different companies.
http://www.blackstone.com/private_equity/index.html
Investment Approach
We have a rigorous investment approach, extensive due diligence focus, global reach, substantial transaction and financing expertise and focus on operational oversight. The following are some of the core investment principles of our corporate private equity funds.
Large Capitalization Focus
Large-capitalization buyouts are often the most difficult transactions to analyze and execute, given their complexity and geographic scope and the size of the equity investment required. Large-capitalization buyouts often involve more stable and higher quality companies tend to attract more capable and deeper management teams and yield more options for growth, repositioning, cost reduction and exit. Given our global reach, our network of skilled former senior corporate executives, the size of our capital pool and the depth of our transaction and financing expertise, we believe that we are one of a limited number of firms favorably positioned to participate in this large-capitalization market, which has been the fastest growing segment of the buyout industry. These favorable competitive dynamics and our capabilities and organizational strengths make large-capitalization buyouts particularly compelling opportunities for us.
Corporate Partnerships
Corporate partnership transactions, transactions in which we invest capital alongside a major corporation, represent a signature form of private equity investing for us. As of June 30, 2007, we had invested approximately $5.8 billion of equity capital, or approximately 27% of total corporate private equity capital invested by Blackstone since 1987, in 42 corporate partnerships. These have included transactions with AT&T Inc., General Electric Company, Northrop Grumman Corporation, Sony Corporation, Time Warner Inc., Union Carbide Corporation, Union Pacific Corporation, USX Corporation and Vivendi SA. As corporations increasingly return to the mergers and acquisitions market, we believe this strategy will lead to a significant number of investment opportunities for our corporate private equity funds over the next several years. We believe that teaming up with corporate partners enables us to benefit from access to their knowledge base and anticipated synergies and to compete more effectively against other bidders.
Sector Expertise
Our corporate private equity investment professionals have expertise in all major industries. In addition, we have access to the sector expertise of a broad array of former senior corporate executives with whom we have established informal and formal proprietary advisory relationships and who work closely with our private equity professionals, helping us to source and analyze potential investment opportunities.
Out-of-Favor, Under-Appreciated Industries
We tend to be a contrarian private equity investor. We try to avoid being influenced by swings in conventional wisdom about the relative attractiveness of industries. Instead, we seek to identify out-of-favor, under-appreciated industries, and we have successfully invested in industries such as rural telephony, oil refining, commodity chemicals, coal and automotive parts among others when they were generally perceived to be out of favor with the markets. We also try to identify developing industry trends in order to take advantage of them before they become widely appreciated and to pursue opportunities to change the structure and profit potential of specific industry sectors through consolidation.
Global Scope
We believe that private equity investing outside the United States provides attractive opportunities, and we are therefore pursuing private equity opportunities throughout the world. In Europe, in addition to our hub office in London, we rely on senior advisors who reside in various European countries to assist our London-based private equity professionals. We plan on using a similar approach to expand our reach in the greater China region and other Asian countries with our new office in Hong Kong, as well as in India with our office in Mumbai. We believe we are one of a limited number of private equity firms with the advantage of access to a full range of cross-regional opportunities. We also believe our global reach helps us to better assist our portfolio companies in dealing with developments across various regions of the world, sourcing add-on acquisition opportunities, entering new markets and outsourcing operations to reduce costs.
Distressed Securities Investing
We believe that we have a competitive advantage in periods of weaker economic conditions or uncertainty in the debt or equity capital markets. Through our restructuring and reorganization advisory business and our distressed securities hedge fund, we have access to investment opportunities and expertise regarding companies in financial distress that many of our competitors lack. We have often invested in distressed securities when those opportunities have presented themselves, including successful investments in securities of Adelphia Communications Inc., Charter Communications Inc. and three German cable television companies in the last five years.
Significant Number of Exclusive Opportunities
In recent years we have been able to consider and execute a number of transactions that were either presented exclusively to Blackstone or were offered to only a very limited number of private equity firms. We believe this principally resulted from our strong relationships with major investment banks and other financial intermediaries, our extensive network of senior advisors, our leading position in corporate partnership transactions, our ability to avail ourselves of the resources and relationships that reside in all of our firm's different businesses and our ability to arrange the acquisition of very large capitalization companies.
Superior Financing Expertise
We believe that the broad expertise of all aspects of the capital markets—debt, equity, real estate financing, derivatives and commodities—that resides across all of our firm's businesses enables us to obtain a lower cost of capital for our portfolio companies, reduce risk and uncover hidden asset value.
Operations Oversight
Our portfolio management group consists of professionals with significant operating experience who work with our portfolio companies on operating issues. After a portfolio company acquisition is consummated, our portfolio management group typically works with management of the portfolio company and outside advisors to implement a 100-day plan to enhance the company's operations. Each 100-day plan is reviewed and approved by our investment committee. As part of our portfolio company monitoring program, we enlist our senior advisors to assist our portfolio management group and work closely with portfolio companies to help them improve their operating performance. We believe that the experience of our senior advisors and our own portfolio management personnel, combined with the expertise of our investment professionals in assisting portfolio companies with add-on acquisitions, divestitures, financings and other capital markets transactions, help our portfolio companies enhance value. Our focus on assisting our portfolio companies with operational oversight, as well as our ability to attract, motivate and retain superior portfolio company management teams, are critical to the success of our private equity investments. The majority of our investment gains has resulted from increases in the EBITDA of our portfolio companies.
CoreTrust Purchasing Group
We seek to unlock incremental value in our portfolio companies through the use of efficiencies of scale. We have established a group purchasing organization called CoreTrust Purchasing Group. CoreTrust administers a procurement program in which our participating portfolio companies combine their purchasing power to purchase various goods and services at discounted prices to thereby achieve savings that they were previously unable to obtain on their own. We are expanding this program to cover additional types of goods and services, and over time we expect to expand it to include other operational areas such as outsourcing and information technology.
Alignment of Interests
Recognizing the importance of aligning the firm’s interests with those of its investors, Blackstone’s employees own most of the equity of our public entity and the firm and its employees have invested substantial capital in Blackstone’s corporate private equity funds.
http://www.blackstone.com/private_equity/investment.html
Our corporate private equity operation, established in 1987, is a global business with 94 investment professionals and offices in New York, London, Mumbai and Hong Kong. We are a world leader in private equity investing, having managed five general private equity funds as well as one specialized fund focusing on communications-related investments. From an operation focused in our early years on consummating leveraged buyout acquisitions of U.S.-based companies, we have grown into a business pursuing transactions throughout the world and executing not only typical leveraged buyout acquisitions of seasoned companies but also transactions involving start-up businesses in established industries, turnarounds, minority investments, corporate partnerships and industry consolidations, in all cases in strictly friendly transactions supported by the subject company's board of directors. In total, our corporate private equity operation has raised approximately $36 billion in capital since 1987. As of June 30, 2007, our corporate private equity operation had approximately $31.8 billion of assets under management.
From 1987 through June 30, 2007, our corporate private equity funds have invested in approximately 113 companies in a variety of industries and geographies in pursuit of their investment objectives. The total enterprise value of all transactions effected by our corporate private equity operations through June 30, 2007 was over $199 billion. As of June 30, 2007, our corporate private equity funds had significant equity investments in 44 different companies.
http://www.blackstone.com/private_equity/index.html
Investment Approach
We have a rigorous investment approach, extensive due diligence focus, global reach, substantial transaction and financing expertise and focus on operational oversight. The following are some of the core investment principles of our corporate private equity funds.
Large Capitalization Focus
Large-capitalization buyouts are often the most difficult transactions to analyze and execute, given their complexity and geographic scope and the size of the equity investment required. Large-capitalization buyouts often involve more stable and higher quality companies tend to attract more capable and deeper management teams and yield more options for growth, repositioning, cost reduction and exit. Given our global reach, our network of skilled former senior corporate executives, the size of our capital pool and the depth of our transaction and financing expertise, we believe that we are one of a limited number of firms favorably positioned to participate in this large-capitalization market, which has been the fastest growing segment of the buyout industry. These favorable competitive dynamics and our capabilities and organizational strengths make large-capitalization buyouts particularly compelling opportunities for us.
Corporate Partnerships
Corporate partnership transactions, transactions in which we invest capital alongside a major corporation, represent a signature form of private equity investing for us. As of June 30, 2007, we had invested approximately $5.8 billion of equity capital, or approximately 27% of total corporate private equity capital invested by Blackstone since 1987, in 42 corporate partnerships. These have included transactions with AT&T Inc., General Electric Company, Northrop Grumman Corporation, Sony Corporation, Time Warner Inc., Union Carbide Corporation, Union Pacific Corporation, USX Corporation and Vivendi SA. As corporations increasingly return to the mergers and acquisitions market, we believe this strategy will lead to a significant number of investment opportunities for our corporate private equity funds over the next several years. We believe that teaming up with corporate partners enables us to benefit from access to their knowledge base and anticipated synergies and to compete more effectively against other bidders.
Sector Expertise
Our corporate private equity investment professionals have expertise in all major industries. In addition, we have access to the sector expertise of a broad array of former senior corporate executives with whom we have established informal and formal proprietary advisory relationships and who work closely with our private equity professionals, helping us to source and analyze potential investment opportunities.
Out-of-Favor, Under-Appreciated Industries
We tend to be a contrarian private equity investor. We try to avoid being influenced by swings in conventional wisdom about the relative attractiveness of industries. Instead, we seek to identify out-of-favor, under-appreciated industries, and we have successfully invested in industries such as rural telephony, oil refining, commodity chemicals, coal and automotive parts among others when they were generally perceived to be out of favor with the markets. We also try to identify developing industry trends in order to take advantage of them before they become widely appreciated and to pursue opportunities to change the structure and profit potential of specific industry sectors through consolidation.
Global Scope
We believe that private equity investing outside the United States provides attractive opportunities, and we are therefore pursuing private equity opportunities throughout the world. In Europe, in addition to our hub office in London, we rely on senior advisors who reside in various European countries to assist our London-based private equity professionals. We plan on using a similar approach to expand our reach in the greater China region and other Asian countries with our new office in Hong Kong, as well as in India with our office in Mumbai. We believe we are one of a limited number of private equity firms with the advantage of access to a full range of cross-regional opportunities. We also believe our global reach helps us to better assist our portfolio companies in dealing with developments across various regions of the world, sourcing add-on acquisition opportunities, entering new markets and outsourcing operations to reduce costs.
Distressed Securities Investing
We believe that we have a competitive advantage in periods of weaker economic conditions or uncertainty in the debt or equity capital markets. Through our restructuring and reorganization advisory business and our distressed securities hedge fund, we have access to investment opportunities and expertise regarding companies in financial distress that many of our competitors lack. We have often invested in distressed securities when those opportunities have presented themselves, including successful investments in securities of Adelphia Communications Inc., Charter Communications Inc. and three German cable television companies in the last five years.
Significant Number of Exclusive Opportunities
In recent years we have been able to consider and execute a number of transactions that were either presented exclusively to Blackstone or were offered to only a very limited number of private equity firms. We believe this principally resulted from our strong relationships with major investment banks and other financial intermediaries, our extensive network of senior advisors, our leading position in corporate partnership transactions, our ability to avail ourselves of the resources and relationships that reside in all of our firm's different businesses and our ability to arrange the acquisition of very large capitalization companies.
Superior Financing Expertise
We believe that the broad expertise of all aspects of the capital markets—debt, equity, real estate financing, derivatives and commodities—that resides across all of our firm's businesses enables us to obtain a lower cost of capital for our portfolio companies, reduce risk and uncover hidden asset value.
Operations Oversight
Our portfolio management group consists of professionals with significant operating experience who work with our portfolio companies on operating issues. After a portfolio company acquisition is consummated, our portfolio management group typically works with management of the portfolio company and outside advisors to implement a 100-day plan to enhance the company's operations. Each 100-day plan is reviewed and approved by our investment committee. As part of our portfolio company monitoring program, we enlist our senior advisors to assist our portfolio management group and work closely with portfolio companies to help them improve their operating performance. We believe that the experience of our senior advisors and our own portfolio management personnel, combined with the expertise of our investment professionals in assisting portfolio companies with add-on acquisitions, divestitures, financings and other capital markets transactions, help our portfolio companies enhance value. Our focus on assisting our portfolio companies with operational oversight, as well as our ability to attract, motivate and retain superior portfolio company management teams, are critical to the success of our private equity investments. The majority of our investment gains has resulted from increases in the EBITDA of our portfolio companies.
CoreTrust Purchasing Group
We seek to unlock incremental value in our portfolio companies through the use of efficiencies of scale. We have established a group purchasing organization called CoreTrust Purchasing Group. CoreTrust administers a procurement program in which our participating portfolio companies combine their purchasing power to purchase various goods and services at discounted prices to thereby achieve savings that they were previously unable to obtain on their own. We are expanding this program to cover additional types of goods and services, and over time we expect to expand it to include other operational areas such as outsourcing and information technology.
Alignment of Interests
Recognizing the importance of aligning the firm’s interests with those of its investors, Blackstone’s employees own most of the equity of our public entity and the firm and its employees have invested substantial capital in Blackstone’s corporate private equity funds.
http://www.blackstone.com/private_equity/investment.html
Private Equity - KKR
KKR Private Equity Investors, L.P. (Euronext Amsterdam: KPE) is a Guernsey limited partnership that seeks to create long-term value by participating in private equity and opportunistic investments identified by Kohlberg Kravis Roberts & Co. ("KKR"), one of the world's oldest and most experienced private equity firms specializing in management buyouts. KPE makes its investments through another Guernsey limited partnership, KKR PEI Investments, L.P. ("Investment Partnership"), as its sole limited partner.
http://www.kkrpei.com/
Under current investment policies, KKR Private Equity Investors, L.P. ("KPE") will invest at least 75 percent of its adjusted assets1 in private equity investments identified by Kohlberg Kravis Roberts & Co. ("KKR"). Private equity investments consist of limited partner interests in KKR's private equity funds, co-investments in portfolio companies of such funds and negotiated investments in equity or equity-linked securities. No more than 25 percent of KPE's adjusted assets1 will be opportunistically made in other investments that KKR identifies in the course of its business.
KPE's investments consisted of 100% of the limited partner interests of KKR PEI Investments, L.P. (the "Investment Partnership"). The Investment Partnership's portfolio is comprised of: (i) KKR's private equity funds (KKR European Fund, Limited Partnership, KKR Millennium Fund L.P., KKR 2006 Fund L.P., KKR European Fund II, Limited Partnership, and KKR Asian Fund L.P.), (ii) co-investments in portfolio companies of KKR's private equity funds, (iii) negotiated equity investments, (iv) opportunistic investments, and (v) temporary investments.
KPE has 204,550,001 common units outstanding.
(1) “Adjusted assets” are defined as the Investment Partnership's consolidated assets less the amount of indebtedness that is recorded as a liability on its statement of assets and liabilities.
NAV
As of September 30, 2007, KPE’s net asset value (“NAV”) was $5.3 billion.
http://www.kkrpei.com/invest_overview.html
http://www.kkrpei.com/
Under current investment policies, KKR Private Equity Investors, L.P. ("KPE") will invest at least 75 percent of its adjusted assets1 in private equity investments identified by Kohlberg Kravis Roberts & Co. ("KKR"). Private equity investments consist of limited partner interests in KKR's private equity funds, co-investments in portfolio companies of such funds and negotiated investments in equity or equity-linked securities. No more than 25 percent of KPE's adjusted assets1 will be opportunistically made in other investments that KKR identifies in the course of its business.
KPE's investments consisted of 100% of the limited partner interests of KKR PEI Investments, L.P. (the "Investment Partnership"). The Investment Partnership's portfolio is comprised of: (i) KKR's private equity funds (KKR European Fund, Limited Partnership, KKR Millennium Fund L.P., KKR 2006 Fund L.P., KKR European Fund II, Limited Partnership, and KKR Asian Fund L.P.), (ii) co-investments in portfolio companies of KKR's private equity funds, (iii) negotiated equity investments, (iv) opportunistic investments, and (v) temporary investments.
KPE has 204,550,001 common units outstanding.
(1) “Adjusted assets” are defined as the Investment Partnership's consolidated assets less the amount of indebtedness that is recorded as a liability on its statement of assets and liabilities.
NAV
As of September 30, 2007, KPE’s net asset value (“NAV”) was $5.3 billion.
http://www.kkrpei.com/invest_overview.html
Private Equity - UBS
Private Equity
Active Strategies to Creat Value
Private equity funds are pools of actively-managed capital that invest primarily in private—but also public companies—with the intent of improving operations and adding value. The fund managers seek to create value in the companies in which they invest by improving operations, reducing costs, selling non-core assets and maximizing cash flow.
Private equity funds specialize by:
Strategy — venture capital, mezzanine, buyout, special situations
Industry — business services, retail, technology, et al
Geography — North America, Europe, Asia, et al
And, they create value by pursuing four primary strategies:
Valuation arbitrage — acquiring a sizable position in the stock of undervalued companies, with the intent of improving its fundamentals and maximizing shareholder value
Financial engineering — rearranging a company's capital structure to maximize equity value
Operational enhancement — improving a company's operating earnings and cash flow by making changes to its products or services and controlling costs.
Innovation — funding research and developing commercial applications for new discoveries, with the intent of introducing new products and concepts to the marketplace (usually applied by venture capitalists)
The Case for Private Equity
The potential benefits of private equity investing include:
A larger universe of companies in which to invest as some private equity managers invest in both public and private companies
Historic returns have exceeded those of publicly traded companies*
Low historic correlation with public equity and fixed income markets*
http://financialservicesinc.ubs.com/wealth/Investing/Non-TraditionalInvestments/AlternativeInvestments/PrivateEquity.html
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Private Equity
Putting the future into your portfolio
Characteristics:
Private equity means investing in companies that are not listed on the stock markets. One exception is companies that have decided to de-list themselves, a process known as public to private.
Private equity calls for an investment horizon of at least 10 to 15 years. Investors should not expect any distributions in the first few years. It is only when the companies are sold again that investors will see returns.
More than with any other type of investment, the expertise and experience of the management team are vital elements that determine whether an investment will be successful or not. The difference in returns between those generated by the top quartile of such professionals and the average is striking. The ability to select the best managers and access their vehicles is crucial.
Opportunities:
Private equity investments can generate above-average returns. Since they are mostly not listed on an exchange, they are not subject to the short-term fluctuations typical of the stock markets, and are thus suitable for diversification. Added to a portfolio, they typically improve its overall risk-return profile.
Risks:
Private equity investments are illiquid and can lead to capital losses. Smart, professional diversification and the selection of the best fund managers can reduce these risks, however.
How do you go about investing in private equity?
Indirect forms of investment in private equity, where you delegate the choice of the individual firms to experts, make sense for the majority of investors. At UBS, investors need to have usually around CHF 5 million available for such investments.
http://www.ubs.com/1/e/ubs_ch/wealth_management_switzerland/investing/non_traditional/private_equity.html
Active Strategies to Creat Value
Private equity funds are pools of actively-managed capital that invest primarily in private—but also public companies—with the intent of improving operations and adding value. The fund managers seek to create value in the companies in which they invest by improving operations, reducing costs, selling non-core assets and maximizing cash flow.
Private equity funds specialize by:
Strategy — venture capital, mezzanine, buyout, special situations
Industry — business services, retail, technology, et al
Geography — North America, Europe, Asia, et al
And, they create value by pursuing four primary strategies:
Valuation arbitrage — acquiring a sizable position in the stock of undervalued companies, with the intent of improving its fundamentals and maximizing shareholder value
Financial engineering — rearranging a company's capital structure to maximize equity value
Operational enhancement — improving a company's operating earnings and cash flow by making changes to its products or services and controlling costs.
Innovation — funding research and developing commercial applications for new discoveries, with the intent of introducing new products and concepts to the marketplace (usually applied by venture capitalists)
The Case for Private Equity
The potential benefits of private equity investing include:
A larger universe of companies in which to invest as some private equity managers invest in both public and private companies
Historic returns have exceeded those of publicly traded companies*
Low historic correlation with public equity and fixed income markets*
http://financialservicesinc.ubs.com/wealth/Investing/Non-TraditionalInvestments/AlternativeInvestments/PrivateEquity.html
----------------
Private Equity
Putting the future into your portfolio
Characteristics:
Private equity means investing in companies that are not listed on the stock markets. One exception is companies that have decided to de-list themselves, a process known as public to private.
Private equity calls for an investment horizon of at least 10 to 15 years. Investors should not expect any distributions in the first few years. It is only when the companies are sold again that investors will see returns.
More than with any other type of investment, the expertise and experience of the management team are vital elements that determine whether an investment will be successful or not. The difference in returns between those generated by the top quartile of such professionals and the average is striking. The ability to select the best managers and access their vehicles is crucial.
Opportunities:
Private equity investments can generate above-average returns. Since they are mostly not listed on an exchange, they are not subject to the short-term fluctuations typical of the stock markets, and are thus suitable for diversification. Added to a portfolio, they typically improve its overall risk-return profile.
Risks:
Private equity investments are illiquid and can lead to capital losses. Smart, professional diversification and the selection of the best fund managers can reduce these risks, however.
How do you go about investing in private equity?
Indirect forms of investment in private equity, where you delegate the choice of the individual firms to experts, make sense for the majority of investors. At UBS, investors need to have usually around CHF 5 million available for such investments.
http://www.ubs.com/1/e/ubs_ch/wealth_management_switzerland/investing/non_traditional/private_equity.html
Private Equity - Citibank
January 08, 2007
Citigroup Private Equity Closes $3.297 Billion Private Equity Fund, Citigroup Capital Partners II
New York ? Citigroup Private Equity today announced the recent closing of Citigroup Capital Partners II (CCP II?), a $3.297 billion fund that makes direct private equity investments in partnership with leading private equity firms.
Citigroup Capital Partners II seeks to construct a well-diversified portfolio of direct investments in equity or equity-related securities or instruments with a primary focus on leveraged buyouts and recapitalizations. Investments are expected to be made in partnership with a variety of private equity firms and be diversified across a range of industries, geographies and transaction sizes. CCP II closed with $3.297 billion of committed capital, comprising commitments from Citigroup clients and employees, as well as Citigroup proprietary capital.
Our strong and experienced investment team, distinct strategy and high level of client service all contributed to making this fundraising a success,? said John Barber, Managing Partner of Citigroup Private Equity.
We believe there continues to be a significant need for capital in the private equity marketplace. CCP II provides a valuable and timely source of capital that has enabled Citigroup Private Equity to partner with premier private equity firms to seek to build a diverse portfolio of investments.
Barber further commented, Our private equity relationships, which are valuable in sourcing and evaluating investment opportunities, combined with Citigroup's vast network and expertise, create a competitive advantage for CCP II. We are pleased with the success of the fundraising, and look forward to working with our partners to continue to source and evaluate new investments for the portfolio.
As part of Citigroup Alternative Investments, Citigroup Private Equity manages and advises on approximately $12 billion in private equity fund commitments, non-control direct private equity investments and mezzanine investments on behalf of proprietary accounts and clients of Citigroup Inc. Citigroup Private Equity's experienced investment professionals are based in New York and London and oversee more than 330 limited partnership investments in private equity and over 75 direct investments.
Reported Assets Under Management are as of December 31, 2006. The total includes discretionary, non-discretionary and monitored accounts representing client, proprietary and employee capital. The assets include committed, but not yet funded, amounts and are valued using a variety of methods. A minority of the assets may be valued as of the end of the prior quarter.
Citigroup Alternative Investments
Citigroup Alternative Investments is an alternative investment platform that manages a wide range of products across four asset classes, including private equity, hedge funds, real estate, structured products and managed futures. CAI manages capital on behalf of Citigroup, as well as third-party institutional and high net worth investors. As of September 30, 2006, CAI had approximately $44.9 billion of un-levered assets under management, ranking CAI among the world's largest alternative asset managers. CAI's goal is to enable its 14 investment centers to retain the entrepreneurial qualities required to capitalize on evolving opportunities, while benefiting from the intellectual, operational and financial resources of Citigroup.
Citigroup
Citigroup, a leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage and wealth management. Major brand names under Citigroup?s trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney and Banamex. Additional information may be found at www.citigroup.com.
http://www.citigroup.com/citigroup/press/2007/070108a.htm
Citigroup Private Equity Closes $3.297 Billion Private Equity Fund, Citigroup Capital Partners II
New York ? Citigroup Private Equity today announced the recent closing of Citigroup Capital Partners II (CCP II?), a $3.297 billion fund that makes direct private equity investments in partnership with leading private equity firms.
Citigroup Capital Partners II seeks to construct a well-diversified portfolio of direct investments in equity or equity-related securities or instruments with a primary focus on leveraged buyouts and recapitalizations. Investments are expected to be made in partnership with a variety of private equity firms and be diversified across a range of industries, geographies and transaction sizes. CCP II closed with $3.297 billion of committed capital, comprising commitments from Citigroup clients and employees, as well as Citigroup proprietary capital.
Our strong and experienced investment team, distinct strategy and high level of client service all contributed to making this fundraising a success,? said John Barber, Managing Partner of Citigroup Private Equity.
We believe there continues to be a significant need for capital in the private equity marketplace. CCP II provides a valuable and timely source of capital that has enabled Citigroup Private Equity to partner with premier private equity firms to seek to build a diverse portfolio of investments.
Barber further commented, Our private equity relationships, which are valuable in sourcing and evaluating investment opportunities, combined with Citigroup's vast network and expertise, create a competitive advantage for CCP II. We are pleased with the success of the fundraising, and look forward to working with our partners to continue to source and evaluate new investments for the portfolio.
As part of Citigroup Alternative Investments, Citigroup Private Equity manages and advises on approximately $12 billion in private equity fund commitments, non-control direct private equity investments and mezzanine investments on behalf of proprietary accounts and clients of Citigroup Inc. Citigroup Private Equity's experienced investment professionals are based in New York and London and oversee more than 330 limited partnership investments in private equity and over 75 direct investments.
Reported Assets Under Management are as of December 31, 2006. The total includes discretionary, non-discretionary and monitored accounts representing client, proprietary and employee capital. The assets include committed, but not yet funded, amounts and are valued using a variety of methods. A minority of the assets may be valued as of the end of the prior quarter.
Citigroup Alternative Investments
Citigroup Alternative Investments is an alternative investment platform that manages a wide range of products across four asset classes, including private equity, hedge funds, real estate, structured products and managed futures. CAI manages capital on behalf of Citigroup, as well as third-party institutional and high net worth investors. As of September 30, 2006, CAI had approximately $44.9 billion of un-levered assets under management, ranking CAI among the world's largest alternative asset managers. CAI's goal is to enable its 14 investment centers to retain the entrepreneurial qualities required to capitalize on evolving opportunities, while benefiting from the intellectual, operational and financial resources of Citigroup.
Citigroup
Citigroup, a leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage and wealth management. Major brand names under Citigroup?s trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney and Banamex. Additional information may be found at www.citigroup.com.
http://www.citigroup.com/citigroup/press/2007/070108a.htm
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