On Private Equity Helping the Banks

In response to a New York Times editorial, here’s a concise and well-thought out reply from the head of the ACG in Boston.

Here’s the Carlyle Group’s Olivier Sarkozy (half-brother of French President Sarko) and Randal Quarles making their case for private equity.

Stating the Obvious: European LPs Interested in Diversifying into Emerging Markets

European private equity advisory firm Epiven has released a report stating that 88% of the LPs they surveyed in Europe expect to increase their allocations towards China within the next five years. But does this really tell us anything? Most LPs will say that they don’t wish to have all their eggs in the same proverbial basket, so why wouldn’t someone surveyed say they want to branch out from their current investment base into a growing market?

On the subject of China, Guy Fraser-Sampson wrote an interesting article for Real Deals on why he feels that buyout firms looking at, and investing in China now will be let down much like PE firms were in the early 1990’s and that the country is about 10 years away from being truly attractive for private equity. Worth reading!

US Venture Capital Investment in Cleantech Sets Record High in Q2 2008

Ernst & Young has just released a report covering Q2 2008 numbers for U.S. venture capital investment in cleantech. For the quarter American VC investments in the sector were nearly $1B which is an increase of 41% from Q1 2008, and up 83% from a year earlier (not bad considering overall VC investment in the U.S. was down 8% in Q2 versus Q1). According to the Cleantech Group U.S. venture investment represented 74% of the global total, while European venture-backed investments accounted for 13%.

KKR Comes Up Short in Europe

Yeah, more KKR news.  It seems that each passing day brings another KKR headline.  The firm’s KKR Europe III fund is expecting a final close of $7B after an 18-month fund raising period, which is in line with the firm’s last effort in the region, KKR Europe II, but well below the $10B they had expected to raise.  While on the surface this may look troublesome, one has to take into account that large-cap deals are still painfully slow to come by and having too large a fund right now may not be in line with current market conditions, i.e. while many would instinctively wish to raise ever larger funds, that mentality may not be appropriate for the times.  Plus a $7B fund is still tremendously large for Europe.

Also, don’t ever count KKR as down.  They’re pioneers of the industry, a great firm, and garner much deserved attention (sometimes good, sometimes bad), and as business school students seeking to have successful careers in private equity after graduation we should follow the firm with much interest.  We’re certain to have more headlines to follow soon!