It has not been an easy year for Permira, 3i Group, Apax, and Terra Firma, some of the largest European buyout firms. Portfolio company trouble for these firms has been well-publicized, and while their write-downs are comparable to what we’ve unearthed of their U.S. counterparts, their leadership has reacted much differently.
Permira, which has several troubled portfolio companies including ProSiebenSat.1, recently bent over backward for its largest shareholder, SVG Capital, allowing it to cut its commitment to Permira’s funds. Despite that, SVG said it won’t make any new commitments to Permira for the next two years, which will make fundraising tough.
So what did Chairman Damon Buffini decide to do? More deals! Today Buffini announced he’d step down as chairman and resume a role he held previously as a dealmaker, sitting on the firm’s board and investment committee.
Guy Hands made a similar move at his firm, Terra Firma. Formerly the CEO, Hands stepped down to take on the Chairman and Chief Investment Officer roles after the company wrote down its largest investment, in music label EMI Group, by half.
Earlier this year, 3i Group suddenly replaced its CEO Philip Yea with its head of infrastructure after the firm’s top investments fell just over 21% in value in Q4 of last year.
This all leads me to ask, were they public (Blackstone notwithstanding), would we have seen some bloodshed or at least reshuffling at the top of poor-performing U.S. buyout firms? In particular, Apollo Management and TPG come to mind…
On a lighter note, the CEO of Apax, Martin Halusa, has rustled up a little positive PR by selling sandwiches for charity. (See photo). Halusa’s firm recently wrote down its stake in business publisher Emap to zero, which explains some of the proposed photo captions on this twitter page. They include: “EMAP staff retraining program,” and “Private equity returns to bread and butter deals…”