The world this month – September 2009

PLACEMENT BAN PROPOSED
The US Securities and Exchange Commission has unveiled proposed rules that would, among other restrictions, ban private equity firms from hiring placement agents to raise money from public pensions. The rules include a prohibition on the use of third parties to solicit business from government entities. If enacted, this rule would prevent placement agents from raising money from public pensions on behalf of their general partner clients, a potentially severe blow to the private funds placement industry.

EX CINVEN PARTNER JOINS CLEANTECH FIRM
Peter Gangsted, a partner and former member of Cinven’s executive committee, is joining cleantech-focused venture firm Curzon Park Capital. Gangsted ran Cinven’s Frankfurt office and was a member of Cinven’s board. During his seven years with the firm, he was active in deals including the successful acquisition and exit of Kloeckner Pentaplast, a plastics packaging company. In his new role, Gangsted will assist Curzon’s board to manage the firm’s debut fund, the £20 million Sustainable Technology Fund and advise on future business strategy.

INVESTORS FLOCK TO 3I FIRM’S INDIAN IPO
The initial public offering of 3i portfolio company Adani Power has been over-subscribed 21.64 times, according to data from India’s National Stock Exchange (NSE). The strong response is particularly significant given the slowdown in India’s IPO market – NSE data shows that this year there have so far been only seven issues, compared to 32 issues in the first seven months last year. In all of 2008, there were 36 issues on the NSE, representing a 163 percent drop from 2007 totals.

GERMAN FORKLIFT FIRM GETS CASH INJECTION
Kion Group, one of the three largest forklift truck manufacturers in the world, is to receive a €100 million cash boost from its two financial sponsors, Kohlberg Kravis Roberts (KKR) and Goldman Sachs. Kion Group was acquired for €4 billion in 2006 by a consortium including Goldman Sachs Capital Partners and KKR in one of Germany’s largestever private equity deals. The €100 million loan will come in the form of a payment-in-kind (PIK) note: a type of debt whereby the note holder may receive additional debt coupons instead of cash interest payments.

CARLYLE’S POLISH TEAM RISES AGAIN AT START-UP
Ryszard Wojtkowski, formerly a senior adviser at The Carlyle Group, has started raising a €200 million private equity fund to invest in the Polish mid-market. Carlyle shut down its Warsaw-based operations in November 2008 as it sought to cut costs amid the financial downturn. The 12-strong Warsaw team, led by Wojtkowski, had been established just one year earlier. Wojtkowski’s new venture – Resource Partners – comprises six members of the former Carlyle team.

KKR IN BERTELSMANN MEDIA RIGHTS LINK-UP
Kohlberg Kravis Roberts is lending its weight to a music rights management platform in partnership with German media group Bertelsmann. Bertelsmann, which will own 49 percent of the joint venture, is contributing its BMG Rights Management unit to the undertaking, which “will be integrated into the equity fund Bertelsmann set up two years ago”, according to a statement. In April 2007, Bertelsmann teamed up with the buyout arms of Citi and Morgan Stanley to create a €1 billion media-focused private equity fund. KKR said it will invest in the BMG Rights Management joint venture from its European funds, which as of June had roughly $6.2 billion in dry powder.

ACA RAISES $200M FOR WEST AFRICA
Lagos, Nigeria-based private equity firm African Capital Alliance (ACA) has attracted $200 million for a first close of Capital Alliance Private Equity III (CAPE III), the firm said in a statement. The firm is targeting between $350 million and $500 million for its third fund, which will focus on investments in West Africa. Among those to commit to the first close are international development finance institutions including CDC Group, the European Investment Bank, the International Finance Corporation and the Netherlands Development Finance Corporation (FMO).

NEW CIO ANNOUNCED AT OMERS
Ontario Municipal Employees’ Retirement System has promoted its property head Michael Latimer to chief investment officer as the Canadian pension significantly ramps up its direct investment activities. Latimer spent the past four years as chief executive of OMERS’ real estate arm, Oxford Properties, and before that was with the Toronto-based REIT, Primaris. OMERS said in a statement the appointment would allow Michael Nobrega, president and chief executive officer of the C$43.5 billion (€28.4 billion; $39.9 billion) pension, to focus on corporate strategy.

MALTESE BANK BUY FOR ANACAP
UK-based AnaCap Financial Partners plans to capitalise on growth in Malta’s international banking market with the purchase of Mediterranean Bank. Catering to Maltese and international high-net-worth individuals, the four-year-old private bank hadn’t “reached critical mass” before the onset of the credit and wider financial crises, AnaCap principal Chris Patrick said, adding: “As part of the bank’s natural expansion and development it did need extra capital and expertise and we are very pleased to be providing both.” Financial terms of the transaction were not disclosed.

ALASKA ENDOWMENT BACKS OAKTREE
The Alaska Permanent Fund, the state’s $32 billion oil and gas endowment, recently committed $250 million to Oaktree Capital Management’s eighth fund, which is targeting between $4 billion and $6 billion. Alaska has not made commitments to private equity over the past few months, and even pulled back on $650 million in recommended commitments to infrastructure and private equity funds in February. But in May the fund set aside $500 million for private equity investing in the fiscal year 2010, and gave its staff more flexibility to directly manage the private equity portfolio.

POMONA BEATS SECONDARIES FUND TARGET
Pomona Capital has closed its seventh secondaries fund on $1.3 billion, 30 percent above its original target of $1 billion. The seventh fund was “substantially oversubscribed despite the challenging economic environment”, the firm said in a statement. Pomona Capital VII, which was in fundraising for about a year, will focus on buyout and venture capital funds, as well as portfolios of private equity-backed companies from “investors who desire liquidity”, the firm said. Pomona’s sixth fund closed on $821 million in 2005, $221 million over its original target.

MALAYSIAN FUND ADDS KEY STAFF
The Malaysian government has appointed key management personnel for Ekuiti Nasional Berhad (Ekuinas), a private equity firm established last month that will manage RM10 billion ($2.9 billion; €2 billion). Raja Arshad, former executive chairman and senior partner at PricewaterhouseCoopers Malaysia, will be the firm’s chairman. Arshad also currently sits on the board of Khazanah Nasional, the Malaysian sovereign wealth fund. Abdul Rahman Ahmad, the outgoing managing director and chief executive of Media Prima, Malaysia’s largest integrated media investment group, will be chief executive and director of Ekuinas.

LAZARD SNAPS UP CHICAGO GP
Investment bank Lazard has purchased the management vehicles of The Edgewater Funds, a Chicago-based private equity firm, for an undisclosed amount, continuing its expansion into the world of private equity. Edgewater will keep its current management team, which retains a significant economic stake in the firm, Lazard said. Edgewater is focused on growth investments and buyouts in the US mid-market. The firm is led by founder and managing partner James Gordon. Edgewater manages two mid-market funds, Edgewater Growth Capital Partners and Edgewater Growth Capital Partners II, with about $700 million of assets under management.