October 2009 Issue

IPEV board member Katharina Lichtner on the evolution of its private equity valuation guidelines.

A challenging economic climate calls for innovative ways of producing greater savings and efficiencies within companies. Kevin Ley and Jennifer Harris explore some ways in which private equity firms, with this in mind, are interacting with their portfolios.

Why smart data management is essential for general partners, portfolio companies, investors and regulators. By iLevel Solutions

GPs need to directly engage lawmakers and policymakers in order to address the many regulatory threats to the industry.

Firms considering winding down a fund should closely communicate with their LPs over how to handle a difficult-to-sell portfolio items, as investors will almost always prefer an extension over receiving shares of a private company.

The mega-firm is expected to begin trading on the Amsterdam-based Euronext on Thursday.

Several Canadian provinces have taken measures to entice private equity and venture capital funds to register up North.

The likelihood of increased departures and retirements within the private equity industry means that more firms should start thinking about succession planning now.

UCITS-compliant funds are becoming an increasingly popular vehicle for fund managers looking to get around the strict regulatory burdens and resulting compliance costs of a new EU directive due to be voted on in Parliament by the end of the year.

A recent survey of hedge fund and private equity managers by research group Open Europe says that additional compliance requirements that would arise from proposed EU regulations – including hiring third-party valuators and depositories – could cost the industry billions over the next few years, pushing ever more managers out of the European Union.

Levine Leichtman, HM Capital, Access Capital and Falconhead Capital will pay a total of $4.5 million as settlements with the New York attorney general’s office.

As portfolio company bankruptcies mount, check to make sure there aren’t any holes in your directors & officers coverage.

Private Equity Manager sought out feedback from several different private equity players with regard to 'Private Equity Principles' just released by the Institutional Limited Partners Association. The LP-friendly suggested partnership terms are seen by some non-LPs as less than perfect.

Although more UK managers are looking to relocate to Guernsey or Jersey for tax purposes, such a move may not be as easy as it used to be.

As secondary market activity heats up, US funds need to look sharp to avoid being categorised as a publicly traded partnership – and taxed accordingly.

New EU regulatory proposals would create a number of additional costs for funds - expenses that likely will be passed on to the investor community.

The European trade body is the latest to stress placement agents ‘play a crucial role’ in the private investment fund industries.

New changes to the International Private Equity and Venture Capital Valuation (IPEV) guidelines will provide additional clarity for valuing early stage investments, debt instruments and LP interests. In addition, the 'one-year-at-cost' notion has been demolished.

Investor-friendly carried interest, fee, GP commitment, key man and transparency terms are promoted in a new set of ‘Private Equity Principles’ from the trade association for limited partners, whose members control the vast majority of commitments to private equity managers.

Draft guidance from the US accounting rules body would require private equity CFOs to document multiple potential valuations for portfolio investments, an added complexity that some argue would muddy investor relations.

Few private equity firms have undergone thorough and expensive SAS 70 audits. But as the asset class matures and firms, especially multi-platform players, become bigger and more diverse, this yearly check on controls might become the standard in the US.

UK fund managers must weigh the impact of critical issues before deciding to make the move to lower-tax jurisdictions like Guernsey, Jersey or Switzerland. In the meantime, boosters for these other domiciles are eager to extol the virtues of relocation.

The London-based firm has strengthened its bench after its seventh fund dramatically increased its AUM this year.

General partners will need to more carefully communicate around tax planning with their limited partners in the wake of new provisions to the IRS Code dealing with the deferment of cancellation of indebtedness income.