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February 1, 2008

BC Partners Realise Loss On Mark IV Investment

by Stewart Douglas

Story link: BC Partners Realise Loss On Mark IV Investment

British based equity group BC Partners is today thought to have lost in the region of £112 million after it sold its stake in engineering systems firm Mark IV Industries after seven years of an interest in the company, in a move which has seen the company offloaded for but a fraction of its acquisition cost.

The firm, working in consort with a number of other investment funds realised a loss on the disposal of the engineering firm it acquired back in 2000, at an inconvenient time for private equity firms to be realising losses given the market externalities.

Whilst the news is no doubt disappointing for the firm and its investors, those that have exposure to BC’s investment funds will feel no financial impact as a result of previous writedowns against the value of the asset which effectively reduced its book to nil.

The news has been seen by analysts as a reminder for investment firms that even deals struck in calm market conditions can realise a loss over time, and that not all investments can be expected to consistently realise a profit.

BC Partners, who enjoy a close professional relationship with premier boutique law firm Dickson Minto, have announced their intention to expand further into the US investments market, with a view to capitalising on the current economic climate stateside, which looks set to lead to cut-price investment opportunities.

BC have already made significant management changes in order to facilitate their US expansion, moving a number of executives to their New York offices in order to lay the infrastructure for further targeted investment, despite the losses realised today.

 

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