Hedge funds and Private Equity - PES

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208 References Wirtschaftswoche 02.09.04, p. 78; Frankfurter Rundschau 09.06.05, p. 9; Handelsblatt 09.06.05, p. 11; Der Spiegel 02.05.05, p. 134; Handelsblatt 06.05.05, p. 3; Süddeutsche Zeitung 07./08.05.05, p. 27; Handelsblatt 24.05.05, p.17; Frankfurter Allgemeine Zeitung 24.05.05, p. 18; Süddeutsche Zeitung 31.05.05, p. 28, Süddeutsche Zeitung 01.09.05, p. 30. Financial Times Deutschland 24.08.06, p. 3; Börsenzeitung 10.01.07, p. 13; Frankfurter Allgemeine Zeitung 10.01.07, p. 19; Frankfurter Allgemeine Zeitung net 15.01.07.
Gate Gourmet 1. Company description For a long time Gate Gourmet was considered SwissAir’s “Crown Jewel”. The company was worth roughly 6 billion Swiss Francs before the bankruptcy of Swissair and the 9/11 impact on the aviation sector. Gate Gourmet, was bought by Texas Pacific Group in 2002 for around CHF 1 billion. Gate Gourmet’s then CEO welcomed the sale with these words: “Through a combination of strategic acquisitions and organic growth, Gate Gourmet should experience continued success.” At the time of its acquisition by Texas Pacific Group, Gate Gourmet employed over 26,000 workers in 33 countries with 144 flight kitchens. As Gate Gourmet was formerly the wholly-owned airline catering division of SwissAir, Gate Gourmet were publicly listed. After the Texas Pacific Group acquisition Gate Gourmet is now a privately held company. In practice this means that almost none financial details concerning the company are disclosed. 2. Economic and social effects 2.1 LBO description (offshore base, activity focus, etc.) Texas Pacific Group (TPG) is a leading global private investment firm with over $30 billion of capital under management. TPG manage several types of funds including private equity, venture capital and public equity and debt investing. The firm was founded in 1992. Holdings have included stakes in technology (Seagate Technology, ON Semiconductor), consumer franchises/products (Burger King, Ducati), retailers (J. Crew, Petco), airlines (Continental, America West), and entertainment (Metro-Goldwyn-Mayer). In 2006 Texas Pacific Group raised a $15 billion sized buyout fund. 2.2 Effects on job creation, investments in training and education of labour force, investment in innovation Workers at Gate Gourmet have experienced severe job cuts since being acquired by Texas pacific group. At the time of the acquisition, Gate Gourmet employed 26 000 workers operating 144 flight kitchens. The company today operates 97 flight kitchens with 20 000 employees, despite the fact that airline traffic has recovered from the 9/11 shock. On March 2, 2006, Reuters reported the following: A day after Texas Pacific Group joined other powerful private equity houses in a call for more transparency; the firm’s mystery sell-off of Gate Gourmet reveals just how much work the industry has ahead of it. TPG, which bought the airline catering firm in late 2002 from Swissair, has quietly reduced its stake in the business over the past year without any disclosure, selling the last piece to Merrill Lynch on Thursday. Gate gourmet employees learned about it through the press. Especially one round of job cuts has caught the attention of the media and public: In August 2005 some 800 workers were sacked by the airline caterer Gate Gourmet at London Heathrow airport. The Transport and General Workers Union (T&G) had been in negotiations with Gate Gourmet since February over measures to deal with a massive projected operating loss at Heathrow. A rescue package was put forward in June, but when it became clear that management was excluded from the cost-cutting measures, the workforce rejected the package. In Annex – 21 Case studies 209
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HEDGE FUNDS AND PRIVATE EQUITY A CR
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FOREWORD Since the 1980s the financ
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At the same time the PES Group took
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84.57 7 447.586 4789.4785 55 7845 4
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12 The need for long-term investmen
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14 1. Hedge funds and private equit
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16 In a very low interest-rate land
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18 The ECB has highlighted this cro
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20 in the sustainable development o
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22 Coherence, co-responsibility and
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24 Transparency in practise Some ar
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26 Ensuring more and better jobs An
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84.57 7 447.586 4789.4785 55 7845 4
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32 The first era of capitalism took
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34 1. Hedge funds In the following
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36 Hedge funds have a structure sim
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38 Hedge funds have flourished in a
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40 The European hedge fund industry
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42 Institutional investors Current
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44 - Funds of hedge funds (FOHFs) i
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46 If we assume US mutual fund indu
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48 the hedge funds themselves would
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50 management fees? It is a fact th
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52 These data notwithstanding, seve
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54 1.11. Tendency of crowding Despi
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56 Theory of money: “In modern ec
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58 Country France Italy Spain Subje
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60 Considering single strategy prod
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62 2. Private Equity Funds Private
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64 Buy-outs are typically majority
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66 2.3 The legal frame The investme
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68 What could you do with 72 billio
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70 And it highlights the comparativ
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72 The figures provide a substantia
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74 2.8 When targeting a company Whe
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76 Domicile of the fund The choice
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78 Specific economic function of Ve
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80 Mortgaging the future to capture
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82 Main conclusions: The total Euro
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84 3. The European response - curre
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86 Article 49 Within the framework
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88 The purpose of this Directive is
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90 As far as the hedge fund and Pri
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92 The following are regarded as se
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94 3. A Member State may entrust ma
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96 Article 93 The Council shall, ac
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98 Primarily, however, society must
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Social Europe versus capital market
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1. Economic viability of private co
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as a rule without any influence fro
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Here is a quite well known “flow
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2. Decent work and workers’ parti
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The pension funds of companies bein
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usiness plan for Kion to employee r
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The combination of increased indebt
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The EU has in the past tried to com
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3.1 The attractiveness of public ut
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fulfilment of public service respon
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The importance of Europe’s transi
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4. Employees, pension fund investme
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unit of Tremont Capital Management)
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contractual issues e.g. Lock-in per
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As many jurisdictions require benef
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Expert Group claims - with striking
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The rising number of hedge funds ap
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time peak in 2005.” It is importa
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Box 2: The Amaranth case (2006) In
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gies, size and age. For instance, i
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Box 3: Complex leverage arrangement
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force a hedge fund to default on it
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Private equity - especially in the
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finance infrastructure through long
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84.57 7 447.586 4789.4785 55 7845 4
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154 But if we in Europe - and hopef
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156 2. Market transparency - a comm
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Page 189 and 190: AA 1. Company description The Autom
Page 191 and 192: Autoteile Unger 1. Company descript
Page 193 and 194: Bulgarian Telecommunications Compan
Page 195 and 196: Deutsche Börse 1. Company descript
Page 197 and 198: DIS 1. Company description The DIS
Page 199 and 200: DT-Group 1. Company description DT
Page 201 and 202: share alternative. At that time the
Page 203 and 204: Frans Bonhomme 1. Company descripti
Page 205 and 206: Friedrich Grohe AG 1. Company descr
Page 207: their relations with TPG and CSFB a
Page 211 and 212: ISS Denmark 1. Company description
Page 213 and 214: 2.2 Debt structure, alteration of c
Page 215 and 216: References Süddeutsche Zeitung 09.
Page 217 and 218: 2.3 Management policies and shareho
Page 219 and 220: would have unlocked hidden reserves
Page 221 and 222: Peguform 1. Company description The
Page 223 and 224: Picard 1. Company description Picar
Page 225 and 226: Stork 1. Company description The in
Page 227 and 228: special members of the board of com
Page 229 and 230: EUR 5.1 billion private equity fund
Page 231 and 232: Telecom Italia Group 1. Company des
Page 233 and 234: 2.3 Management policies and shareho
Page 235 and 236: from the tourism business, which is
Page 237 and 238: The consequences for jobs in Hambur
Page 239 and 240: 2.4 Corporate governance and econom
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Page 244 and 245: 244 Bond A debt investment with whi
Page 246 and 247: 246 Investment vehicle This term is
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