Archives for May 29, 2012

2011 Carried Interest and Compensation Survey

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Our fifth annual survey of carried interest and compensation for private equity funds was a huge success. We had 272 funds participate in this year’s survey, the most ever. The survey results total 38 pages of graphs and data. In addition to giving the breakdown of carry allocation among the different partner/employee groups within a fund by fund size, the survey also shows salary, bonus and carry compensation by fund size among 11 different partner/employee classes. This year, for the first time, we also provide 3 year averages for compensation for all of the partner/employee classes.

SUPPORT THE DIGEST!
When I launched Private Equity Professional Digest back in 2007 one of my publishing friends asked me what other companies were already competing in the private equity space. I told him that Thomson Reuters and Dow Jones were already there. I remember well his words of encouragement –

“They’ll squash you like a digital bug.”

Well four years later Private Equity Professional Digest is still here and doing quite well. We may be only four people up against the thousands at Thomson Reuters and Dow Jones, but we are a highly motivated crew.

It’s a classic David vs. Goliath and just like David we’re battling the giant Goliath through wits and hard work. Now I need to ask a favor. If you’re reading this you’ve accessed our 2011 Carried Interest and Compensation Survey which is available free of charge only to our paid members. If you’re not a paid member (it is so hard to control digital content these days) would you please think about joining? A one-year membership is only $250 a year and for that you get full access to the Digest, a free subscription to our daily e-newsletter Morning Coffee and copies of all our surveys. You can join the Digest by going to our membership page.

I hope you find the 2011 Carried Interest and Compensation Survey interesting. We put in a lot of time and effort to make this survey one of the best in our industry and we appreciate all of your support (it makes fighting Goliath everyday a bit easier).

Our survey results speak for themselves. So, without further ado (what is ado and why can’t we have more of it?), just click on the survey icon below to download a copy of the 2011 Carried Interest and Compensation Survey. The password to open the document is “supportthedigest”.

NXT Capital Increases Debt Capacity to $1.6 Billion

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NXT Capital has increased its total debt financing capacity to $1.6 billion and expanded its senior secured revolving credit facility from $650 million to $740 million. “The recent upsizing of the credit facility and successful issuance of NXT’s first CLO further diversify NXT Capital’s financing sources and provide over $1 billion in debt capacity for NXT’s Corporate Finance business alone,” said Neil Rudd, NXT’s Chief Financial Officer.

The increase in the facility is comprised of commitments of $50 million from Capital One Bank and $40 million from EverBank Commercial Finance, who now join Co-Arranger SunTrust Bank, BMO Capital Markets Corp. and Key Corp. in NXT Capital’s bank group. In conjunction with this increase, NXT also received reduced pricing and an extension of the maturity date until April 2017.

“We are very pleased to add Capital One Bank and EverBank to our bank group. Their support for NXT is a welcome endorsement of our platform and future prospects,” said Robert Radway, NXT’s Chairman and CEO. “We also appreciate the bank group’s willingness to improve the terms of the facility commensurate with NXT’s performance and overall financial profile.”

NXT provides structured financing to middle-market and growth companies through its Corporate Finance, Real Estate Finance and Venture Finance groups, originating transactions directly on a national basis. The company targets senior financing opportunities of up to $150 million with a hold size up to $50 million. NXT Capital is led by former principals of Merrill Lynch Capital and was formed in 2010 by Stone Point Capital and the founding management team. The firm is based in Chicago with offices in New York, Atlanta, Boston, Dallas, Newport Beach and Silicon Valley (www.nxtcapital.com).

Thomas H. Lee Partners Announces Departure of Vice Chairman

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Thomas H. Lee Partners has announced that Scott Schoen has stepped down as Vice Chairman of the firm, effective earlier this month. Mr. Schoen will remain a Senior Advisor to the firm. “It has been a privilege to work with my colleagues at THL, our portfolio companies and our limited partners over the last 26 years. I am proud of the franchise we have built, and I am confident that the firm will realize even greater success in the future,” said Mr. Schoen.

Mr. Schoen joined THL in 1986, served as Co-President of the firm from 2003 through 2009, and as Vice Chairman since then. Mr. Schoen will continue to serve as a board member of Acosta, Inc. and Nielsen Holdings N.V., both current portfolio companies of THL.

“My partners and I thank Scott for his many years of service and for his friendship. We will continue to look to Scott as a friend and trusted advisor,” said Anthony DiNovi, Co-President of THL.

Thomas H. Lee, founded in 1974, is one of the oldest private equity investment firms in the United States. Industries of interest include Business and Information Services; Consumer Products/Retail; Financial Services; Health Care; Industrial; and Media/Communications. Since its founding, THL has raised approximately $20 billion of equity capital and invested in more than 100 businesses with an aggregate purchase price of more than $150 billion. The firm is ased in Boston, MA (www.thl.com).

Thomas H. Lee Partners to Acquire Fogo de Chão

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Thomas H. Lee Partners (THL) announced today that it has signed an agreement under which it will acquire Fogo de Chão Churrascaria (“Fogo”), a group of Brazilian themed fine dining, full-service restaurants, from GP Investments. “With three new restaurants opened in the past 12 months, Fogo has charted a compelling growth path. We couldn’t be more pleased to be partnering with an investor like THL. Their expertise in working with management teams to support and deliver profitable growth in consumer-driven businesses is a great match for Fogo, our passion for the guest experience and where we are heading in the future,” said Larry Johnson, Chief Executive Officer of Fogo.

Fogo de Chao is an authentic Southern Brazilian steakhouse or churrascaria. Founded in 1979 in Southern Brazil, Fogo expanded into the US in 1997. The company’s U.S. restaurants are in Atlanta, Austin, Baltimore, Beverly Hills, Chicago, Dallas, Denver, Houston, Indianapolis, Kansas City, Miami, Minneapolis, Philadelphia, San Antonio, Scottsdale, Washington DC, Las Vegas and Orlando. Brazilian restaurants are in Vila Olímpia, Moema and Santo Amaro in São Paulo; Salvador, Brasília, Belo Horizonte and Rio de Janeiro. The company is headquartered in Dallas, TX (www.fogo.com).

“We have tremendous respect for Fogo’s innovative dining experience and unparalleled commitment to customer service and quality. This tradition of excellence has been built and nurtured at Fogo over the past three decades and has continued in recent years under the leadership of the Fogo management team. We look forward to working with the team to continue to grow the business for the benefit of all Fogo stakeholders,” said Jeff Swenson, Managing Director of THL.

Thomas H. Lee, founded in 1974, is one of the oldest private equity investment firms in the United States. Industries of interest include Business and Information Services; Consumer Products/Retail; Financial Services; Health Care; Industrial; and Media/Communications. Since its founding, THL has raised approximately $20 billion of equity capital and invested in more than 100 businesses with an aggregate purchase price of more than $150 billion. The firm is based in Boston, MA (www.thl.com).

GP Investments, is a leading alternative asset investment firm in Latin America, has been actively investing in the region since 1993. GP Investments has raised over $5 billion with a track record of 49 completed deals across 15 different sectors. In May 2006, GP Investments concluded its IPO, becoming the first listed alternative asset investment firm in Latin America. The firm is based in São Paulo, Brazil (www.gp-investments.com).

J.P. Morgan and Jefferies Finance are providing committed financing for the transaction. Jefferies & Company acted as financial advisor and Weil, Gotshal & Manges acted as legal advisor to THL.

Bain Exits Motorized Vehicles Division of FCI

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Delphi Automotive announced today that it has entered into exclusive negotiations and has made a binding offer to acquire FCI Group’s (“FCI”) Motorized Vehicles Division (“MVL”), a manufacturer of automotive connection systems and a portfolio company of Bain Capital. The transaction is valued at €765 million on a cash and debt-free basis (approximately $972 million at current exchange rates) and is expected to close by year-end 2012.

MVL, which will become part of Delphi’s Electrical/Electronic Architecture segment, is a provider of interconnection systems for a range of applications in the safety restraint systems, powertrain and electrical vehicles markets. MVL had revenue of €692 million in the year ended December 31, 2011.

FCI is a manufacturer of connectors for use in electronic, micro-connector, electrical, and automotive applications. The company was acquired by Bain in 2005. FCI is based in Guyancourt, France (www.fci.com).

Bain Capital manages several pools of capital, including private equity, venture capital, and public equity and leveraged debt assets. The firm has more than $66 billion in assets under management. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in more than 300 companies in a variety of industries around the world. The firm has offices in Boston, New York, Chicago, London, Munich, Tokyo, Shanghai, Hong Kong and Mumbai, with over 800 employees worldwide (www.baincapital.com).

Water Street Acquires Breg

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Orthofix International announced today that it has completed the divestiture of its Sports Medicine Business Unit, Breg, Inc., to Water Street Healthcare Partners. The purchase price was $157.5 million less normal and customary working capital adjustments and indebtedness.

Breg provides a portfolio of sports braces (knee, elbow, shoulder, spine and foot) and cold therapy products to treat a variety of sports medicine related conditions. The company is headquartered in Carlsbad, CA (www.breg.com).

Water Street plans to build Breg into a company specializing in non-surgical orthopedic products. Breg is Water Street’s fifth company specializing in medical products and the firm’s second investment in the rehabilitation industry. Curt Selquist, an operating partner with Water Street who previously served as the company group chairman of Johnson & Johnson Medical, will serve as the lead director of Breg.

Water Street Healthcare Partners is a Chicago-based private equity firm focused exclusively on healthcare. The firm has more than $1 billion of capital under management. The firm has particular expertise in corporate divestitures from healthcare companies (www.waterstreet.com).