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Investment is all about predictability and the last five years have not been conducive to that. The latest casualty (or casualties if you count the individuals concerned) is the private equity firm, Apax Partners.
It has been announced that the company intends to make what it must believe to be essential changes in order to presumably achieve the fund growth that it requires to move forward – or at least to stay in the game.
The changes include a cut in its workforce – specifically its investment staff – of 10%, and the reduction of its London headquarters by way of subleasing two of its five floors. Offices in St James’s, an upmarket area of the capital where Apex is located, are popular, and the savings in rent could prove valuable to Apex.
It is believed that these financial decisions are to aid the company’s attempt to raise capital for a new fund. Of the eleven investment professionals who will be leaving Apex, six are partners. Other savings include the closure of the company’s Milan office, which took place last year.
Apex Partners is a long-time player in Europe’s buyout business, but the current circumstances demonstrate that age and experience are not necessarily the factors that will carry a company through these tough and unreliable economic times, especially when the company is involved in raising investment for funds. It has been trying to raise €9 billion for its latest fund, and while it’s clearly not the only player in the market to be seen as struggling, investors have had concerns over the company’s funds’ performances – understandably, since, as Reuters reported in June 2012, over half the senior dealmakers have left the company since 2008.
Eugene O’Sullivan, surveyor at Morgan Pryce, comments “The company’s new office in Brazil may well be a sensible move, but it will not go all the way to satisfying investors or putting their worries to bed.” He adds, “The company will be hoping that it’s not taking action which is too little, too late.”
Apex will be acutely aware of the better successes of its competitors, such as Cinven and Advent International: the former has reached its target of €5 billion while the latter has raised the largest fund since 2008, at €8.5 billion.
Morgan Pryce is a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.