Tourists who flock to Venice will have many reasons for doing so. They may be exploring the famous canals by gondola, staring in awe at the magnificent St Mark's Basilica, or perhaps marvelling at the view from atop the Rialto Bridge. It is likely that few will travel there to pay homage to the roots of the private equity limited partnership.
And yet, according to research from Austrian private equity professional Hans Lovrek, Venice is due this unlikely accolade. Lovrek, who advises Austrian investors on their allocations to the asset class, is currently researching a thesis that compares modern private equity partnerships to their medieval predecessors. In doing so, he has discovered that today's LP bears an uncanny resemblance to the
He found that risks to the
The concepts of co-investment and diversification are also, it appears, far from modern. A merchant banker would apparently corral a number of families to cofinance ships, thereby creating the ability to “spread his own funds over several projects”.
Furthermore, the asset class was far-reaching: so popular was it that “the participation of more humble people like orphans, widows, nuns, priest or craftsmen was not uncommon”. This effectively created something of a fundraising boom. And perhaps that's where the comparisons with today end.
QUOTABLES
Charlie McCreevy, European Commissioner for internal market and services, in his opening speech to the EC Conference on Private Equity & Hedge Funds in Brussels
São Paulo-based GP Investments' senior partner Octavio Lopes in a podcast with the University of Pennsylvania's Wharton School
Muhtar Kent, president and chief executive of the Coca-Cola Company, responding to the decision of China's Ministry of Commerce to block his firm's planned $2.4 billion takeover of Hui Yuan Juice, a Chinese juice maker part-owned by private equity firm Warburg Pincus
Patricia Cloherty, founder of Russia-focused Delta Capital Partners and a 40-year private equity veteran, speaking at
Where it all began
Where it all began 2009-04-01 Staff Writer Tourists who flock to Venice will have many reasons for doing so. They may be exploring the famous canals by gondola, staring in awe at the magnificent St Mark's Basilica, or perhaps marvelling at the view from atop the Rialto Bridge. It is likely that few will trav