For Immediate Release

Private equity conference draws industry leaders

Thunderbird School of Global Management became the epicenter for discussions with some of the private equity industry’s most notable leaders, on the heels of a turbulent year where the community has faced more public exposure then ever. In the school’s fourth annual Private Equity Investing Conference, held from April 3 and April 4, dozens of national and international investment leaders discussed the next step for an industry entrenched in shifting American and European markets while looking for a foothold in the world’s latest emerging economies.

Titled Private Equity’s New World: Global Deal Sourcing, Financing and Exiting, the conference showcased keynote speeches by industry leaders such as A. Charles Baillie, co-head of the Private Equity Group and co-chairman of the Investment Committee at Goldman Sachs; John de Yonge, Ernst & Young global research director, Venture Capital Advisory Group; and Joseph Quinlan, U.S. Trust-Bank of America Private Wealth Management managing director and chief market strategist.

“It’s an impressive lineup here, but that’s what we’re about,” said Peter Wolken, vice chairman of the Thunderbird Private Equity Center Executive Advisory Board. “If you want to know what is going on in this area, this is the place to be.”

The two-day conference included breakout sessions with prominent international fund managers who discussed a wide range of pressing topics, including ways to improve the private equity industry’s tepid representation by mainstream media, the reality of increased international investment in the United States and what direction the industry is headed.

One of the most talked about issues is where the world’s money is going - and coming from. With China, India and Middle Eastern countries playing a larger role in the investment community, some of the older, more established markets will have to adjust.

As more investment dollars enter the U.S. from places like China and Dubai, and investment into Africa and South America heightens, the private equity industry will be seeing some changes, Quinlan told the audience of more than 200 during his keynote address.

“I don’t think the U.S. and Europe are ready for this seismic change,” Quinlan said. “Developing markets are no longer going to be pushed around by already developed nations.”

While the U.S. is mired in what most consider its first recession in six years, the nation’s leaders should not turn their backs on international investors, Quinlan said. Much like the late 1980s, when Japanese firms purchased American landmarks like Rockefeller Center, U.S. leaders are taking a protectionist attitude to countries like China and India. In fact, these countries should be supported as they inject much needed capital investment into a slowing American economy.

De Yonge’s presentation also underscored the importance of emerging markets such as China and India to the venture capital industry, and later in the conference, Thunderbird graduate Robert Theleen, founder and Chief Executive of ChinaVest, and Amit Ratanpal, Head of Private Equity at ICICI Bank Ltd. in India, further set the tone that the Far East is closer than ever in terms of investing in the U.S. and opening its own borders to international investment.

Others at the conference agreed, including Sari Anabtawi, executive director for business development of Abraaj Capital LLC in Dubai. He joined Jonathan Cole, partner in Edwards Angell Palmer & Dodge LLP and John Vester, partner in Transaction Advisory Services at Ernst & Young, LLP, to discuss the reality of private equity investment’s value proposition.

“A lot of money is flowing out of the region, banks are flush with cash,” he said of the Middle East. “It’s not just about money (though). It’s about what you bring to the table.”

This was an important theme, especially for the attending Thunderbird students, said Bo Hansen, 28, an MBA candidate. He was among two dozen students taking the opportunity to listen to and network with the industry’s most important firms. Like other students, he said he thinks the private equity industry is often misunderstood, especially in mainstream media.

“There’s a lot of people out there watching how companies are purchased, questioning if a large firm is just buying it, stripping it and flipping it,” he said. “This is a pretty crucial conference. It shows that private equity firms tend to be late-stage investors who are adding value to the company over the course of six to seven years, then selling it in better shape than when it purchased it.”

Public perception was a hot topic in a session led by Alexander Leventhal, CEO of Broadgate Consultants and Robert Stewart, vice president of public affairs at the newly formed Private Equity Council. Both said mainstream media has latched on to half of the issue - the buying of a company - but has yet to understand that private equity firms look to improve the quality of the business. While there are instances of employment restructuring and management dispersal, situations wrought for public scrutiny, the private equity community must promote the value it adds to the purchased company, Stewart said.

“In the last few years, private equity firms have been called greedy, raiders and ’vulture’ investors,” he said. “You have to listen to what is being said and try to educate the people saying it.”

While speakers and panelists spoke highly of the global private equity scene, certain U.S. industries have, and will continue to, fair better than others. The lightning-fast evolution of the technology industry has further distanced itself from the dot-com bust of 2001 and 2002, said Robert Grady, Managing Director of the Carlyle Group. But unlike before, investment firms are not necessarily looking at the physical product as the main motivation for purchasing a company.

“Sometimes, the next big thing is creating a better business model to deliver the same technology,” he said. “You are also seeing the application of technology to domains where that technology has not been deployed before.”

Other technology-related industries, including ’clean tech’ and other environmental-based industries, will be another hot spot in future investment, multiple panelists said during the conference. Life sciences, namely the biotechnology and pharmaceutical industries, have struggled in the recent years, said Fred Craves, Bay City Capital LLC founder and managing director. While bearish on the recent IPO market exit strategy, he and panelists Loren Busby, NGN Capital managing director and Dr. Michael Scheffery, OrbiMed Advisors LLC general partner, said in the global spectrum, bringing drugs to market in other countries may be the key.

“The market for IPO in life sciences is non-existent,” Craves said. “There is no idea when it is coming back.”

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