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Tag Archives: private equity

Individual Accountability for PE Executives Continues to Increase Under Legal and Regulatory Changes

By Simon Baskerville, David Berman, Farah O’Brien and Alex Hewett Corporate accountability has been a key focus for UK legislators and regulators since the credit crisis, as authorities have taken action against corporate failings. In our view, this focus is evolving to emphasise individual accountability. Developments enacted by the Small Business, Enterprise and Employment Act … Continue Reading

Economic Nationalism Set to Impact M&A Transaction Approvals Across Europe

By Jonathan Parker, Jana Dammann and Doug Abernethy Growing economic nationalism is threatening to impact M&A across Europe, as governments and regulators take an increasing interest in “foreign” acquisitions of nationally important companies in the name of national security. PE deal teams have previously focused on existing national security review regimes, including the Committee on Foreign … Continue Reading

Early Partial Exits Pose Opportunities and Challenges for Private Equity

By Thomas Tharakan The exit environment recently ranked as the second greatest challenge facing global PE fund managers, according to Preqin’s H1 2017 Outlook report. As buyout firms weigh an uncertain exit outlook, they are increasingly seeking to de-risk early by selling minority stakes in portfolio investments to preferred LPs. Partial exits to LPs have … Continue Reading

PRI’s Private Equity Terms Guidance Focuses on Environmental, Social, and Governance (ESG) Factors

By Paul Davies and Michael Green On 13 July 2017, Principles for Responsible Investment (PRI) launched guidance on incorporating environmental, social, and governance (ESG) provisions in private equity fund terms. The publication, Incorporating Responsible Investment Requirements into Private Equity Fund Terms (the Guidance), followed a year-long consultation period with PRI signatories, expert counsel, and industry … Continue Reading

Private Equity and Privilege: Why Recent Legal Developments Matter to Buyout Firms

By Stuart Alford QC, Daniel Smith and Kem Ihenacho Legal professional privilege allows clients to share information with lawyers, knowing it need not be revealed in court. Privilege extends to legal advice generally, and to documents prepared in contemplation of litigation. Privilege has important implications for private equity beyond litigation, and can affect how firms … Continue Reading

Selling to China: Four Key Questions All Private Equity Deal Teams Should Ask on an Exit

By Frank Sun Chinese acquirers are playing an increasingly important role as buyers of private equity sponsored companies — nearly 200 portfolio companies were sold to Chinese entities in 2016. However, in our view, measures taken by the Chinese government to scrutinise transaction fundamentals more closely and slow capital outflows have impacted deals. The number … Continue Reading

Buyout Firms Must Take Action to Respond to Global Cyber Threats

By Gail Crawford Cybercrime has become a critical issue for buyout firms as hackers are increasingly targeting sensitive business data to profit from insider knowledge. According to a Private Funds Management survey of 91 PE houses, 54% of PE firms said they had been hit with a cyberattack, while 45% said cybersecurity was a high … Continue Reading

Prosecuting Corporate Offending – A New Approach from the Serious Fraud Office

By Stuart Alford QC and Daniel Smith Deferred prosecution agreements (DPAs) became part of the prosecutors’ toolbox in 2014, allowing for settlement instead of bringing a case to trial. Recent statements from the Serious Fraud Office (SFO) indicate an increasing willingness to seek DPAs. The SFO has concluded two DPAs so far, and we expect … Continue Reading

Warranty and Indemnity Insurance – Is the Silver Bullet Beginning to Tarnish?

By Neil Campbell and Leif Schrader Warranty and indemnity (W&I) insurance products have been marketed as a “silver bullet,” which can bridge the gap between a buyer’s wish to receive proper deal protection and a seller’s aim of a clean exit. However, as the market continues to mature, insurers are becoming cautious and terms are … Continue Reading

Sustainable Investment and ESG Compliance ─ Emerging Litigation

By Sophie Lamb and Paul Davies There is an increasing desire amongst PE firms to publicise value creation through the use of bespoke metrics to measure improvements and value derived from (ESG) policies including improved reputational risk management; better and more transparent governance; better health, environmental and safety standards; heightened efficiency; less disruption as a … Continue Reading

French Civil Code Reform Sparks Quiet Revolution in Management

By Benedicte Bremond and Gaetan Gianasso Since the era of Napoleon Bonaparte, French contract law has largely been governed by the same Civil Code. This year has seen a quiet revolution in the French legal system, bringing about modernisations that will improve the investment environment for buyout firms, particularly as relates to management equity. In … Continue Reading

New UK Foreign Investment Controls May Restrict PE Deals

By John Colahan As part of UK Prime Minister Theresa May’s new industrial strategy, private equity deal teams should expect a more interventionist approach to the acquisition of strategically important UK businesses by foreign buyers. The UK government has signaled its intention of creating a “proper industrial strategy”, making it capable of stepping in when … Continue Reading

Know Your Code: Open Source Usage Can Close Software Commercialisation Prospects for Tech Targets

By Deborah Kirk Buyout firms spent more than $39.38bn acquiring technology businesses in H1 2016, accounting for 28% of all global deal value and making technology the preferred sector for investment during the period. With investment flooding into tech, private equity is facing competition and increasingly high deal valuations. Tech companies pose unique diligence issues … Continue Reading

PE Set To Benefit From More Outward Looking Chinese Buyers

By Amy Beckingham In recent years, Chinese companies have become increasingly bold in the search for new deals, looking beyond the country’s borders for transformational takeovers. This year already, we have seen the largest ever outbound deal attempted by a Chinese company, with ChemChina’s $43billon bid for Swiss agribusiness Syngenta. As China becomes more relaxed … Continue Reading

CMA Taking Increasingly Intrusive Approach To Monitoring UK Deals

By Jonathan Parker Since its launch in April 2014, the Competition and Markets Authority (CMA) has played a crucial role in determining the outcome of some of the UK’s headline deals. Last year alone, the CMA scrutinised over 60 deals including Poundland’s takeover of 99p Stores, and ran the rule over bookmaker Ladbrokes’ takeover of … Continue Reading

Israel’s Anti-Concentration Law Presents Unique PE Opportunity

By Joshua Kiernan In December 2013, Israel introduced new legislation — the Law for the Promotion of Competition and Reduction of Concentration — designed to break the dominance of large corporations and strengthen competition in the country’s economy. This “anti-concentration law” will soon come into effect, heralding a huge shake-up in the country. Many of Israel’s … Continue Reading

Pension Fund Health-Check Required

By Catherine Drinnan and Shaun Thompson The recent furore over the collapse of high street retailer BHS has caused fierce debate over whether companies, or their ultimate owners, are responsible for the upkeep of a pension plan. For private equity, the debate has important implications. In the US, pensions have also been hitting the headlines. … Continue Reading

The Liquidity Crunch Spurs Creative PE Deal Financing in the US

By Manu Gayatrinath and Katherine Putnam Since the 2008 financial crisis, the US Federal Reserve and other central banks in Europe have pumped trillions of dollars into the financial markets. Notwithstanding the amounts injected, a liquidity crunch in 2016 is unavoidable and could have a significant impact on available financing for PE sponsors. Several regulatory … Continue Reading

Oil price turbulence benefits the opportunistic

By Simon Tysoe The prolonged turbulence in oil prices has brought cost reduction programmes, the shelving of projects, and insolvencies in the oil field services (OFS) and exploration and production (E&P) sectors — and has presented a once in- a-generation buying opportunity. Although many companies are focused on pure survival, there are buyers willing to … Continue Reading

US M&A Litigation: Will the Changing Landscape Shift to the UK?

By Howard Sobel, Michele Johnson, Sarah Diamond and Anna Hyde Following nearly every announcement of a public-company acquisition in the US, including take-private acquisitions by private equity investors, plaintiffs’ law firms file class actions on behalf of shareholders. These actions are usually based on allegations that the target board of directors breached fiduciary duty (for … Continue Reading

Infrastructure Investors: Is Your State Aiding You?

By Elisabetta Righini Investment in the infrastructure that keeps Europe running smoothly continues to be a big theme in European private equity. In every sector, from energy to sport, from transport to broadband, governments are increasingly calling in the private sector to build and operate infrastructure assets. Indeed, spending on infrastructure received a boost in … Continue Reading

Fees: Increasing Requirements for Disclosure Continue

By Tom Alabaster and Nick Benson  Outside money managers are facing increasing scrutiny about the value they provide, particularly since the 2008 financial crisis. In a previous publication from September 2014, we wrote that the US Securities and Exchange Commission’s (SEC) increasing examination of fees could cause industry-led change. We are now seeing this change transpire. … Continue Reading

Gaining Appropriate Control in Italian Minority Investments

By Stefano Sciolla Minority investments are an increasing feature of the Italian PE market. One key driver of minority investments is demand from many entrepreneurs, founders and small and medium-sized businesses for funding to refinance existing debt, pursue acquisition opportunities or to expand their operations. Many are discovering that funding is unavailable from traditional sources … Continue Reading

Making the Most of Earn-outs

By Tom Evans and Linzi Mutter Earn-outs, where additional consideration is paid post-completion based on the performance of a target business, are becoming increasingly common in private M&A transactions. Our recent survey of European deals between July 2013 and June 2015 shows earn-outs were used twice as often as during previous periods surveyed, although overall, … Continue Reading
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