Three More Cracks in the Wall

 

According to Reuters, Bain is going to suspend management fees on some of its older funds.  Despite appearances this is not an act of charity by the kind people at Bain.  These funds are getting long in the tooth, but Bain knows it won't find buyers for the portfolio assets until the economy recovers.  In the meantime all remaining uncalled capital must be hoarded to protect these orphans.  One day, when the sky is blue again and the companies can be sold, Bain will be back for its fee! 

The Financial Times says that Candover is going to to release its LPs from a significant portion of their commitments to the firm's recent €3bn fund.  This is particularly humbling for Candover because the largest LP in the fund was their own listed vehicle, Candover Investments, who have stated that they intend to make "a significant reduction" in their €1bn commitment. 

I've commented recently that an exodus of talent is one of the PE industry's emerging problems, so this quote caught my eye:  "A person with direct knowledge of Candover’s strategy said that its biggest worry was to ensure that its best people are retained in spite of an expected “internal rationalisation”.

Finally, I hear from a reliable source that Merrill Lynch Global Private Equity is closing its doors.  At the height of the boom MLGPE was a gorilla in the PE market with about 70 staff and billions invested.  As the attached MoneyWatch article from 2007 says, "they were everywhere."  MLGPE has a team here in Sydney (they jointly acquired VedaAdvantage with PEP), who I understand will leave their offices in Governor Phillip Tower next week.

Comments

[nkalakatha]

Sorry to be pedantic, but you have a couple of typos in this entry:

- "Horded" = "Hoarded"
- "Guerilla" = "Gorilla" - unless you are suggesting that MLGPE adopted mujahideen-like tactics in their pursuit of deals, which I don't think would really be true ;)

[GP]

Thanks. That's what happens when I sneak a post in between meetings . . . quality control collapses!

GP