The Chairman, The Pension Risk, The Bribe and
The Pilot's Case

The spring thaw has arrived in force, and so has the surge in sales of BBQs. When I first moved to the UK nearly 8 years ago, I felt very popular when I was asked to countless barbeques. I smugly thought that my American wit and charm (not an oxymoron for anyone sniggering) had suddenly become a necessary part of many London garden (or backyard as I would say) events. Very quickly my bubble was burst when I came to realize that Brits plan vast numbers of barbeques because so many get rained out; plan one for every weekend and hope that one out of four come through. I was also handed the spatula and fork often as not, perhaps expected routinely to churn out perfect steaks and burgers.

So too has the spring thaw continued in the private equity universe. Deal flow continues to improve, as money is being spent (often times having to be spent) amid a new enterprise value equilibrium that seems to have taken hold. And more work for PILOTpartners too, for which our thanks. Few outrageous bargains, but few over the top deals either.

One of the chief benefits coming from this protracted economic slump has been the way that many investment directors and partners have had to focus even more attention on existing businesses, in effect becoming firms of portfolio directors. This certainly cannot be a bad thing when new deals are analyzed and structured, particularly when leverage returns in force.

Pieces within this issue of Pilot's Log include:

• Peter Chappelow, a private equity portfolio chairman, explains how he side stepped retirement to become a very successful serial chairman, and the lessons he has learned along the way.
• Kelvin Wilson of Grant Thornton explains in great detail the need for private equity firms to have a thorough understanding of the financial risks associated with defined benefit pension schemes when acquiring new portfolio companies.
• The first PILOTcases, a new feature going forward that will regularly show the type of work our executives perform. In fact this is at the specific request of clients who have said they want to understand more about assignments and projects in our niche. The inaugural piece touches on four cash-strapped turnaround / restructuring situations which resulted in significantly improved results and/or exits.
• Richard Isham, a partner with Wedlake Bell who advises on all aspects of employment and human capital law, both contentious and non-contentious, provides us with a very concise and timely analysis of how the new Bribery Act will impact on private equity firms and their portfolios.

As always, please feel free to follow up directly with any of our contributors for further information. And on behalf of all of us at PILOTpartners we hope that you and your families have a peaceful and enjoyable Easter break.

Michael Gebauer Partner – private equity practice E. m.gebauer@pilotpartners.eu T. +44 (0)783 423 5458