The global financial meltdown is taking its toll on the European private equity. Candover Investments, the European private equity firm Candover's listed arm, has said that it will stop investing in firm's 2008 fund. The listed arm has also said that Asian and Eastern European operations will either be put on a self-financing basis or closed down. The Candover's team in Asia is looking to raise a dedicated fund in order to self-finance their operations. If they do not succeed in raising funds, these operations will have to cease, the statement further added.
Candover started its Asia operations last year and hired Jamie Paton from 3i Group to establish a team based in Hong Kong. It has also hired Harsha Raghavan from Goldman Sachs to head its India operations.
"The goal has always been to raise a dedicated Asian investment vehicle over the course of 2009 and we are continuing to actively consider this option," Raghavan of Candover India told VCCircle. He added that they haven't decided if the fund will be Asia or/and India-focused fund. Also the timeline for raising the fund hasn't been decided yet.
"We continue to see attractive investment opportunities across the region," added Raghavan. Candover India can draw down on capital from interested investors if an investment opportunity arises, said Raghavan.
Candover Investments said that net asset value per share has fell down by 50% at 1026p as at 31st December 2008 compared to 2065p at 31st December 2007. It has also said that it's in discussions with Candover 2008 funds' limited partners (LPs) to restructure the fund. This may include a temporary suspension of the investment till things are finalised, Candover further added.
Last week Candover walked away from its investment in luxury yacht maker Ferretti, which it bought for £1.5 billion in 2006. Its other portfolio companies include gaming group Gala and oil and gas-services provider Expro.
The firm will also cut an unspecified number of jobs. Candover had earlier said that it's looking to cut the size of its latest $3.8 billion fund amid dearth of buyouts. Candover Investments Plc had invested more than $1.25 billion in the fund.
"The prospects for the private equity industry have altered considerably over the last six months. Our priority now is to reinforce the financial position of the firm, so that the value which we believe is inherent in our investments in the Candover 2001 and 2005 Funds can be realised for shareholders over a period of time," said Gerry Grimstone, Chairman of Candover Investments, in a release.
Last fortnight, UK based 3i Group saw top level changes after the private equity firm saw a dip in the value of its holdings.