Private equity firm Carlyle Group has begun raising a $15bn ( 7.6bn) US leveraged buyout fund signalling that the boom in private equity investing shows no signs of abating, it was reported yesterday. The new fund would be nearly double the size of Carlyle's last fund, Carlyle Partners IV, launched in 2005, which was also used for conducting leveraged buyouts in North America.
Buyouts of large listed companies in the US and Europe have proved to be the most profitable activity for private equity firms, encouraging institutional investors such as pension funds to increase their private equity investments. International engineering group Melrose, has pulled off a private equity-style coup, selling a business it bought less than two years ago for almost two-and-a-half times the purchase price. The UK firm will get more than 436m from US private equity investment firm JLL Partners for McKechnie Aerospace, bought 22 months ago for 185m.
Melrose said it expected to return about 200m to shareholders. If it is unable to get the backing of the trustees of the McKechnie Aerospace pension fund in the UK for the deal, the British arm of the business, Linread Ltd, will be excluded from the sale. The chief executive of troubled sub-prime mortgage lender Kensington Group quit yesterday after the company warned that its long-term profits would fail to meet expectations.
John Maltby was succeeded by former managing director Alison Hutchinson. The company said it intends to concentrate on its core business of lending to borrowers with poor credit records. In a statement the Kensington board stated it had "reaffirmed the importance of Kensington Mortgages as a leading specialist lender in the UK, which is the fundamental cornerstone of the future of the group".
Enfis, a pioneer in energy efficient light bulbs, floated on Aim yesterday, underlining the growing importance of greener products in the domestic energy market. The Welsh firm raised 4.5m at 149p a share, giving it a value of 13.
3m. While traditional filament bulbs produce a lot of heat compared with the amount of light they give off, Enfis said its bulb can emit powerful light using a fraction of the electricity. The cost of this environmentally friendly technology makes it too expensive for the average home, but Enfis believe it has a strong market in retail and architectural lighting.
The private equity groups Permira and Apax, which acquired the fashion chain New Look for 699m three years ago, have appointed Merrill Lynch to advise on a sale - with a price tag of 2bn. The Dubai-based Landmark Group has expressed an interest, along with rival buyout groups. The owners are understood to have ruled out an IPO after the poor performance of Debenhams since it rejoined the market last year.
A sale would also allow the two original buyers to take all their profits. The stake owned by the management team, led by Phil Wrigley, could be valued at more than 300m. Fears that rising inflation could spill over into higher pay deals eased yesterday when EEF, the manufacturers' organisation, reported settlements in the sector running at 3% in the three months to the end of February.
Its survey of more than 400 settlements, covering 56,000 employees, included 31 at 4% or more, 30 where pay was frozen and 34 where workers were awarded 2% or less. This week data from the Office for National Statistics showed the retail prices index, used as a benchmark by pay negotiators, rose to 4.6% last month, raising concerns of a further rates rise.
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