Hedge funds and Private Equity - PES

Domicile of the manager
For funds raised:
Many LBO managers are based in London, as the City marketplace is probably the most
cosmopolitan location in Europe for finding a wide range of institutional investors, and
specific taxation schemes are especially attractive for managers splitting location and
placing funds off-shore. But other locations such as Paris are also booming.
For investments:
A large number of LBO management companies wish to remain close to the companies
they invest in, in order to keep a close eye on them, which means that many of private
equity management companies investing largely in French companies remain in France,
as long as they stay in the company (2-3 years) and the same applies to the other continental
EU countries. Among the biggest 8 Member States in terms of private equity
investments, the situation is the following:
€ bn
25
20
15
10
5
0
UK
France
2.11 LBOs’ major strategies
PE investments: location of managers (2005)
Germany
Spain
The Netherlands
Private equity as an asset class is subdivided into a number of sub-categories including:
Venture capital
Expansion (or growth) capital
Buy-outs or buy-ins
Each market segment corresponds to specific company profiles or situations as described
above.
Italy
Denmark
Sweden
Source: EV CA/PWC/Thomson Financial
Manager
location (€bn)
Part I – Hedge funds and private equity funds – how they work
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