Toby Mitchenall
Private equity-backed companies, such as Italian yacht builder Ferretti, accounted for 79% of defaulting companies during 2008, according to Standard & Poor’s. Default rates will continue to accelerate, says the ratings agency.
The European development finance institution has committed to funds from two Central European mezzanine specialists: Mezzanine Management and Syntaxis. It has also approved a €20m commitment to a special situations fund.
The Africa-focused firm has acquired 25% of an insurance and banking group in the Cote d’Ivoire in a deal worth just under $50m. ECP is currently raising its third pan-African fund with a target of $1bn.
Leverkusen-based TMD Friction, which for six years was owned by UK buyout firm Montagu Private Equity, has now been bought out of bankruptcy by UK-based asset management firm Pamplona, saving 3,800 jobs.
Nick Gaynor, Deutsche Bank’s head of financial sponsor coverage for the EMEA region, has joined the subsidiary alternatives firm to lead its charge into direct and co-investments.
The UK government’s safety net, which now contains around £400bn of banks’ risky assets, could delay refinancing procedures and cause lenders to encourage corporate defaults.
Octopus Investments has earmarked a £40m pool of capital to provide finance to small- and medium-sized businesses.
The UK buyout house has booked a €1.3bn impairment – half the value of the equity investment – on the 2007 deal. It will also return €80m of carry to investors, because according to chief executive Guy Hands, 'our investors have suffered and therefore our rewards should suffer'.
The buyout firm will walk away from Italian yacht manufacturer Ferretti, which under the current restructuring plan will remain in the control of the management team led by chief executive Norberto Ferretti.
Borrowers in cyclical sectors, such as the motor trade, chemicals and the media, are likely to have difficulty restructuring their debt, according to recent data. Recovery rates for European buyout debt are likely to hit their lowest ever.