A dispute among the partners of London-based mega-buyout firm Apax Partners was made public last month when Maurice Tchenio, one of the three men who founded the firm more than 30 years ago, sued his partners for allegedly withholding profits and management fees on five European investments.
In the suit filed in London, Tchenio alleges that the undisclosed amount that he is owed comes from recent deals in Sweden, Italy and the Netherlands by Apax Europe V, Apax Europe VI and Apax Europe VII. He has also asked that information be disclosed by Apax offices in Hong Kong and Mumbai.
The firm opened its first Asia office in Hong Kong in 2005 and followed with the Mumbai branch in 2006, with its first investment in the region occurring the following year when it acquired a stake in Apollo Hospitals, India's largest private hospital group. It is set to open offices in Shanghai and Beijing as it has increased its focus on Asian investments.
The dispute between Tchenio and his partners centres on investments made since a 2001 agreement, specifically how much of a share of management fees and carried interest Tchenio may be owed and whether investments in the Netherlands and some start-up fund costs should be factored in. Partners in private equity firms typically earn most of their salaries from carried interest profit sharing agreements.
Apax was founded in 1976 by Tchenio in France, Ronald Cohen in the UK and Alan Patricof in the US. The firm was originally structured as a collection of separate funds, but in 1999 the US, UK, Swiss, German and Spanish operatives merged, while the French operative managed by Tchenio elected out of the merger. As an independent entity the Paris-based branch of Apax invests its own money in deals, while the others invest a combined fund.
In his suit Tchenio said the profit-share agreement was updated as the firm continued to expand its global presence, and that it would be “unjust” for Apax to deny his claim over the millions in profits accrued from European buyouts. But since Tchenio's operation was making investments exclusively in France and the London-based consortium was doing deals in the UK, Germany, Austria and Spain, the other partners contend that Tchenio has no right to profits made in these territories.
Apax currently manages around $40 billion in assets worldwide, and its funds usually invest in values of between $1 billion and $6 billion. Apax Partners broke a European record when it closed its seventh fund on its hard cap of €11 billion in April 2008.
Tri-Artisan Capital names new CFO
Tri-Artisan Capital Partners, a privately held merchant bank active in principal investment and corporate advisory services, has appointed Suzanne Murphy as managing director for fund services, where she will help build a consulting practice catering to hedge and private equity funds. Murphy had previously helped build a $1 billion hedge fund in the equity market neutral space for Acorn Advisory Capital. The bank also appointed David Boemo as managing director and chief financial of-ficer. Boemo previously served as managing director and North American CFO for ABN Amro, where he was responsible for the origination, sales and trading of equity, fixed income, foreign exchange and loan products. Tri-Artisan was founded in 2002 and has offices in New York and London, and employs more than 60 former and current operating executives with experience in health care, technology, industrial, media and communications and retailing. Tri-Artisan earlier this year advised Unifund on the financing of a special purpose vehicle for acquiring distressed consumer receivables, while an affiliate of the firm invested in the $31 billion acquisition of Harrah's Entertainment by Apollo Management and TPG Capital.
KKR gets Macquarie fundraiser
John Brakey is moving from Australian fund of funds specialist Macquarie Fund Management to Kohlberg Kravis Roberts, where he will join the firm's Australian team in the beginning of February 2009. Brakey has served as head of Macquarie's private equity fund of fund business, where he was responsible for all Australian private equity fundraising, fund investments and co-investments. In his new role he will head KKR's fundraising, product development and investor relations effort in Australia, and will likely work closely with Principle Advisory Services, KKR's placement agent in the country. The Macquarie Funds Management's private equity division now comprises 24 people based in Australia, the US, Hong Kong and the UK. It manages more than $5 billion in private equity assets globally as of 31 October 2008. Brakey had previously researched on specialist private equity fund managers at Towers Perrin alongside Michael Lukin, who will be replacing Brakey when he moves to KKR.