More on the Transatlantic VC Model

July 27, 2008

I wrote earlier this week about Partech splitting up and how some considered this an indictment of the transatlantic venture capital model.  Considering the Partech situation as the death knell for VC firms that simultaneously operate on both sides of pond would be a vast exaggeration, although it does exemplify some of the obvious difficulties facing those in similar situations.  Granted the model may not be possible for many to execute, and many of it’s benefits could be gained from co-investing with another VC firm(s) from a given geographical area that will be attractive for the portfolio company’s future (anyone who participated in this years VCIC in London will remember how this point was mentioned multiple times with regards to the Brit company that wanted to expand in the US), it still can make sense though for some.

Here’s an interesting read from Max Bleyleben of Kennet from his Technofile Europe blog (Max went to INSEAD but we won’t hold that against him!) on how to succeed across the Atlantic.  I particularly think his first reason for why certain funds have failed is on the mark.  Having separate funds is bound to generate disagreements from teams in different locales and presents an extra difficulty in attempting to maintain any sense of unity.  I have no idea of what happened at Partech beyond what I’ve read but I would suspect that the decision to split was due to something along those lines.  That being said, it would make for an excellent case study for the club (and there’s the added bonus that partners from both sides of Partech are HEC MBA alums).

PAI Partners forms Akkadia Joint-Venture

July 23, 2008

Another day, another announcement from a private equity firm birthed from old Banque Paribas (now there’s a visual for you!). News today that PAI Partners is launching a joint venture with former Deutsche Bank AG banker Philippe Guez and his partners is popping up everywhere, and was one of the topics of conversation of my dinner this evening. Apparently this is a minor busy season here in the land of wine and cheese for deals as everyone wants to tie up lose ends before heading off to Deauville, Saint-Tropez, or the Bassin d’Arcachon for the summer holidays.

The new firm has been named Akkadia and is planning on taking long-term stakes of between 5 and 20 percent in European companies valued at between 250M euros and 4B euros. Now, PAI has taken minority stakes in firms before (recently with Atos Origin) and European PE firms have historically been more likely make such moves in the past as compared to their US counterparts (sometimes because European regulators would only allow the firms to take up to certain amounts) and given current market conditions this is likely to continue as firms look for places to put their money (but beware of the dreaded drift!).

Bank to the Banque Paribas connection that I eluded to in the beginning of the post, over the years Paribas developed a reputation of being a pioneer in the realm of French private equity and both PAI (which began life as Paribas Affaires Industrielles) and Partech (which was started as the Global Venture Fund), which I wrote about yesterday, have their roots as being part of Banque Paribas, which itself was acquired in 2000 by BNP to form BNP Paribas.

PAI’s Chairman and CEO is Dominique Mégret (HEC 1970).

Partech Split

July 22, 2008

It’s been announced that Partech International Partners has performed a management buyout from it’s parent firm Partech.  The deal was led by managing partners Philippe Collombel and Jean-Marc Patouillaud (HEC MBA ’90) and received the support of their investors.  This comes after the firm called in it’s limited partners to help mediate disagreements amongst the partners earlier this year (which is fairly unique to say the least!).  As others have pointed out, does this call into question the firms’ international venture model?  Or, as both parties imply that they still plan on co-investing together, is this simply a matter of allowing both teams to refocus?  It’s a probably a bit of both.  The benefits of having people on both sides of the Atlantic really show themselves in later stage VC investments and both sides will appreciate having a network abroad at some point, but it’s probably not critical.