Private-equity firms will direct more funds toward listed companies as the market for leveraged buyouts (LBOs) shrinks because of the lack of bank financing, PAI Partner’s managing partner Lionel Zinsou said.
Investment firms will increasingly buy minority stakes in listed companies or even try to take them private, Zinsou said in an interview on Saturday at the Economic Forum of Aix-en-Provence, France.
“Private equity firms have raised hundreds of billions of dollars, so be prepared to see more and more of them invest in listed companies, even minority stakes, as long as the debt market is closed for leveraged buyouts,” Zinsou said. “Stocks are now poorly valued and opportunities arise.”
European private equity firms from PAI to Paris-based Wendel are building minority stakes in companies as a credit crunch dries up the LBO market and as stocks decline on a global economic slowdown.
Buyout firms announced US$103 billion of takeovers this year, about a third as much as in the same period last year, data compiled by Bloomberg shows.
Banks, reeling under billions of buyout debts, are more willing to fund purchases of minority stakes in listed stocks because they are liquid assets, Zinsou said.
Returns can be the same as LBOs, with the difference being that the firm doesn’t exert much influence over the company’s strategy. Private equity firms always try to get influence eventually, he said.
PAI Partners raised 5.4 billion euros (US$8.4 billion) in May for buyouts, twice as much as the 2.7 billion euros the firm raised in 2005. In all, firms raised US$163.5 billion in the first quarter.
Paris-based PAI Partners, which Zinsou joined last Tuesday after 12 years with French advisory bank Rothschild, said last month it has built an 18 percent stake in computer services company Atos Origins SA and gained two board seats. It said that while it may lift its stake further, it didn’t intend to take control of the company.
PAI wants to take part in Atos’s development, Zinsou said.
“We want to be the number one shareholder in Atos, supporting the management,” he said.
After months of battling with Atos’s management, hedge funds Centaurus Capital LP of the UK and Pardus Capital Management LP of the US, which jointly hold 20 percent of the computer services company, were granted board seats last month. They say the company needs a change in strategy.
The market for buyout debt should recover by the second half of next year, Zinsou said.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
CHINA POLICY: At the seventh US-EU Dialogue on China, the two sides issued strong support for Taiwan and condemned China’s actions in the South China Sea The US and EU issued a joint statement on Wednesday supporting Taiwan’s international participation, notably omitting the “one China” policy in a departure from previous similar statements, following high-level talks on China and the Indo-Pacific region. The statement also urged China to show restraint in the Taiwan Strait. US Deputy Secretary of State Kurt Campbell and European External Action Service Secretary-General Stefano Sannino cochaired the seventh US-EU Dialogue on China and the sixth US-EU Indo-Pacific Consultations from Monday to Tuesday. Since the Indo-Pacific consultations were launched in 2021, references to the “one China” policy have appeared in every statement apart from the
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from