Kennet Partners and Barclays Private Equity on the record with Pilot

Almost two months into 2011 and the perceived 'thaw' seems to have been validated with announcements of new deals and fund closings. Will this mean more work for us all?

Within the stressed arena, however, there remains much theorising on why the banks are not doing this or not doing that, with people looking for well thought out strategies. And, surely, the current hysteria in the media surrounding the wider political issues regarding banks' behaviour will do little to sharpen their appetite for lending to SME's which is where most of the UK deals are right now. The reality is that each bank is coping with its own issues, and after pushing through a raft of ugly debt for equity swaps, they have now had time more fully to analyse their less troublesome assets as well as coming to grips with now being unwilling owners, a skill set which takes time to acquire. We think the two biggest events which will trigger more action from the banks are a possible (likely?) interest rate hike and the mammoth amount of deals that will have to be refinanced in later 2011 onwards and especially in 2012 when repayment schedules hit them in earnest. An insolvency practitioner joked that he was considering taking most of 2011 off in anticipation of the unprecedented amount of work destined to come down the pipeline in 2012 and thereafter.

Last week saw the inaugural, well attended event of PILOTpartners' Chairman & Non-Executive Director practice (which just cries out for its acronym 'CANE').

We were very fortunate in having Luke Johnson of Risk Capital Partners as our keynote speaker. A common theme echoed during the evening was the increasing importance of adding very experienced and very 'involved' executives to boards, helping to minimise problems and maximise value. Gone are the days (at least within private equity) of trophy NEDs. This has given rise to an increased level of WIP for PILOTpartners CANE practice over the past twelve months.

Pieces within this issue of Pilot's Log include:

• Dr Peter Hammermann, Co-Head of Barclays Private Equity & Managing Director, Germany provides us with his insights into the German private equity market, its retail sector in particular and some of the market dynamics that are unique to Germany.
• Dr Mike Hicks, formerly Head of Management Assessment at Grant Thornton and now working directly with private equity houses and their investees to assess and improve management and organisational effectiveness, shares his thoughts on private equity management assessment and hiring.
• Tamas Toth, CEO of Interim Resourcing Ltd, PILOTpartners' affiliated firm in Hungary, talks here about trends in the CEE private equity market and the response of the interim management sector to new opportunities in the region.
• David Carratt, a managing director of Kennet Partners' London office, talks shop during one of the most exciting and challenging times for the technology sector.

As always, please feel free to follow up directly with any of our contributors for further information, etc.

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