The IUF's Private Equity Buyout Watch

The Socialist Group in the European Parliament has highlighted the crucial role of financial markets in stimulating the hyperinflation of global food prices and called for urgent action by regulatory authorities. The group tabled three amendments to a motion on EU action to deal with food price inflation.

"The food crisis is closely linked to the financial crisis", said Hannes Swoboda, vice-president of the Group. "It is outrageous that some banks are inviting their clients to speculate on rising food prices. One of our amendments calls for a Europe-wide ban on such speculation. We also want the European Commission to examine the powers of national supervisory bodies to ensure that they can guarantee stable and secure markets and that speculation does not violate the right to food."

More information and a link to the text of the motion are available here.

Posted on May 23, 2008 12:35 PM | Permalink

A new legislative proposal in the UK House of Commons seeks to remedy one of the most glaring gaps in existing UK labour law. Under existing law, when a public or limited company changes hands through acquisition by another company or individual, the existing terms and conditions of employment are protected through the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). TUPE does not apply, however, when a controlling shareholding is transferred to a new owner, who effectively becomes the new employer. And this is precisely the mechanism by which buyout funds take companies private.

Continue reading "Proposed UK Legislation Extends Acquired Employment Rights to Buyouts" »

Posted on March 6, 2008 02:40 PM | Permalink

Always in the forefront of financial innovation, the buyout houses are rushing to speculate in the massive debt their activities have generated. Private equity firms are lining up for the heavily-discounted debt – some USD 350 billion of it - the banks are anxious to unload following the collapse of the high-yield debt market

Continue reading "Locusts into Vultures: Buyout Firms Turn to Speculating in…LBO Debt" »

Posted on October 1, 2007 04:48 PM | Permalink

Gerrit Zalm, the former Dutch Minister of Finance and Deputy Prime Minister who served in various cabinets for the center-right liberal party VVD until February this year has joined Permira as an advisor.

Continue reading "The Carlyle Model: Permira Recruits Former Dutch Finance Minister" »

Posted on September 26, 2007 05:41 PM | Permalink

Mega-billion buyouts may be off the immediate agenda due to the widening credit crisis, but the biggest US-based funds are optimistic about their prospects for beating back proposals to tax fund managers' earnings at a higher rate.

Continue reading "US Private Equity Lobby Claims Progress in Beating Back Calls for Higher Taxes" »

Posted on September 12, 2007 03:15 PM | Permalink

TUAC News: In a letter to OECD Secretary-General Ángel Gurría, John Sweeney, TUAC and AFL-CIO President has called for the OECD to undertake a horizontal consultation on the role of hedge funds and private equity investors in the current financial instability.

Continue reading "TUAC President calls for OECD examination of the role of hedge funds and private equity in current financial instability" »

Posted on August 23, 2007 01:14 PM | Permalink

16 Aug 2007 - Britain's largest union, Unite, said today reports from across its 20,000 members in Sainsbury's showed strong opposition to a possible takeover by Delta Two, the Qatar government-backed fund.

Continue reading "Unite urges Sainsbury's board to block takeover" »

Posted on August 22, 2007 08:29 AM | Permalink

The abundance of cheap credit which has fueled the leveraged buyout boom is evaporating.

Continue reading "The Harsh World of Leveraged Buyouts Has Suddenly Gotten Harsher" »

Posted on August 2, 2007 10:31 AM | Permalink

Trade unions in the UK have criticized the report commissioned by the UK Venture Capital Association - the Walker Review of Disclosure and Transparency in Private Equity published earlier this week – for the voluntary, "self-regulatory" character of its proposals and have highlighted the report's silence on crucial issues concerning worker and trade union rights in the companies targeted for takeover

Continue reading "UK Unions Slam Walker Commission for Silence on Worker Rights" »

Posted on July 19, 2007 12:43 PM | Permalink

Few would doubt that closing tax loopholes which allow private equity firms to deprive public revenues of billions is an important and necessary step. There’s also no doubt that this is the most popular (and populist) measure that can be taken. But it’s far from adequate if governments are serious about reigning in the buyout funds. The main problem of leveraged buyouts by private equity funds is just that... leverage.

Continue reading "Taxes are only half the story, the other is DEBT: Proposals to tax private equity firms are just the beginning, not the end of the debate" »

Posted on June 27, 2007 11:43 AM | Permalink

“Earlier this month, as the Blackstone offering was being prepared, Senate Finance Committee Chairman Max Baucus, D-Mont., and Charles Grassley, R-Iowa, introduced legislation that would require publicly traded partnerships to be treated as corporations for federal tax purposes. Under current law, income distributions from publicly traded partnerships are taxed at the capital-gains rate of 15% -- below the top corporate tax rate of 35%. On Friday, Rep. Sander Levin, D-Mich., introduced a bill in the House that would jack up taxes paid by managers on carried interest to as much as 35% from only 15% now. Carried interest is a portion of the profits from an investment that's paid to the manager. In the private-equity business, it's often used to compensate managers for investing alongside their clients in a buyout. “Private Equity Ends Week On Top In Battle With Congress”, Dow Jones, 22 June 2007.

Continue reading "Private equity firms lobby against new US tax proposals" »

Posted on June 27, 2007 10:41 AM | Permalink

Finally it seems that action will be taken to close tax loopholes that have allowed private equity firms and their billionaire bosses to get away with paying so little tax. As the debate heats up the comments of Nick Ferguson, creator of the business that became Permira and the chairman of SVG capital, the leading subscriber to Permira’s funds, have hit a nerve: “Any common sense person would say that a highly-paid private equity executive paying less tax than a cleaning lady or other low-paid workers... can’t be right.”
Quoted in Robert Peston, “Private grief”, BBC News - Peston’s Picks, 4 June 2007.

Continue reading "Private equity firms "paying less tax than a cleaning lady or other low-paid workers": private equity tax loopholes in the spotlight" »

Posted on June 27, 2007 04:30 AM | Permalink

“The City watchdog yesterday voiced fresh concern about potential market abuse by private equity firms and the "excessive level" of borrowing they use to buy out public companies. In a report released just a day before the Treasury Select Committee begins an inquiry into the increasingly controversial industry, the Financial Services Authority said it believed its statutory objectives were at risk from both.... But it stopped short of imposing new rules, preferring instead to increase the supervision of private equity companies and the banks that lend to them.”

Continue reading: James Moore, “FSA alarmed by leverage in buyouts”, The Independent, 12 June 2007.

Click here to download the FSA's feedback statement on the discussion paper "Private equity: a discussion of risk and regulatory engagement" (11 June 2007)

Posted on June 15, 2007 05:50 AM | Permalink

Union leaders from OECD countries and innernational trade union organizations will call on governments to reinforce international rules and domestic policies to manage the social and environmental cost of globalisation at consultations between the TUAC and OECD Ministers on the evening of 14 May. In a statement issued ahead of the Annual OECD Ministerial (15-16 May), the unions call on OECD Governments to rebalance growth, to invest in social protection and education, and to strengthen rules on international trade, investment and capital flows.

The statement also calls for a coordinated series of OECD regulatory measures in response to the destructive impact of private equity and hedge funds,

Posted on May 11, 2007 03:24 PM | Permalink

Business Day (Johannesburg) NEWS April 24, 2007

By Nicola Mawson Johannesburg

AN AMENDMENT to the Companies Act would make it more difficult for private equity corporations to buy out firms with a slim majority, market commentators have said.

While the new legislation has yet to come into effect, it would require a three-quarter majority to sell more than half a company's assets.

With Brait Private Equity's R14,2bn bid for Africa's largest food retailer, Shoprite, still hanging in the balance, this deal could be the first high-profile takeover to be tested under the new law.

Continue reading "'Companies Act Change May Hamper Brait's Bid' - Business Day" »

Posted on April 30, 2007 10:18 AM | Permalink

On April 19 at the European Parliament in Brussels, the IUF presented evidence on the destructive impact of private equity buyouts on the European food sector, highlighting the buyouts' destructive impact on employment, the environment and employment conditions generally. The seminar was organized by the IUF together with the Party of European Socialists, the structure grouping Europe's labour and social-democratic parties.

Click here to read the IUF presentation.

Posted on April 25, 2007 07:49 AM | Permalink

"EU COMMISSIONER Charlie McCreevy - already under fire for taking time out in Cheltenhamn race week - yesterday took on Europe's socialist group by defending private equity and the huge fees paid to its promoters."

Continue reading "'McCreevy slammed on private equity defence' - unison.ie" »

Posted on March 23, 2007 02:25 PM | Permalink

The ITUC fully support the decision taken by Unions from 15 countries and a dozen global organisations which met at the OECD in Paris and issued a strong call for the activities of companies to be oriented toward long term sustainable investment strategies that create wealth for all, and good employment opportunities for workers. (ITUC 19 March 2007)

Posted on March 19, 2007 09:20 PM | Permalink

"All parties involved in the escalating controversy over shareholder activism in the Netherlands are to be summoned to address an influential Dutch parliamentary committee in a further indication of rising concerns about the activities of hedge funds and private equity. The move comes as European trade unions pledge action against private equity. It follows recent comments by Nout Wellink, president of the Dutch central bank, who criticised hedge fund demands for the break-up of ABN Amro, the largest Dutch bank."

Continue reading: ‘Dutch MPs summon hedge funds’, The Financial Times, 18 March 2007. (Alternate link).

Posted on March 19, 2007 08:31 PM | Permalink

"A demand for a co-ordinated G8 response to the “threat” posed by private equity and hedge funds will be made on Friday by trade union leaders from the world’s leading industrial nations. This will be the latest development in the growing political pressure being brought to bear particularly on private equity."

Continue reading: Andrew Taylor, 'Unions call for G8 action on private equity', The Financial Times, March 15 2007 22:27.

Posted on March 17, 2007 01:43 PM | Permalink

Unions from 15 countries and a dozen global organisations meeting at the OECD in Paris issued a strong call for the activities of companies to be oriented toward long term sustainable investment strategies that create wealth for all, and good employment opportunities for workers. TUAC News 16 March 2007

Continue reading "Unions call on G8 Leaders to work on new transparency and tax rules for private equity - TUAC News" »

Posted on March 16, 2007 02:18 PM | Permalink

Private equity groups in Germany could face lower returns on their investments following proposed tax reforms. The country's finance minister has stated that if the result trims the buyout funds' returns, "Then so be it. That's the point."

Read the whole Financial Times article by clicking here.

Posted on March 13, 2007 09:24 AM | Permalink

"Union leaders from the world's biggest economic powers will meet in Paris this week to take on what they view as the growing threat to their members from private equity. The meeting, set for Friday, was called in the light of intensifying tensions between unions and the private equity industry, particularly in the UK."

Continue reading: Danny Fortson, 'Unions round the world unite against private equity threat', THE INDEPENDENT, 11 March 2007.

Posted on March 11, 2007 03:39 PM | Permalink

Click here to read the full article in THE OBSERVER

Continue reading "'They are a risk to the economy as a whole' - The UK is waking up to the power of private equity. But the IUF has long warned of the dangers. " »

Posted on March 9, 2007 07:39 AM | Permalink

"The leader of the Canadian Auto Workers warned against private-equity control of Chrysler, calling it the "worst-case scenario" for the automaker and a prelude to plant closures and worker layoffs.

"Our fear is private equity," Buzz Hargrove, president of the CAW, said in an interview yesterday. "They are not out to build cars. It could mean throwing a lot of people out of work and then reselling" the company."

Continue reading "'Canadian Union Leader Opposes Private-Equity Deal for Chrysler' - The Washington Post" »

Posted on March 6, 2007 01:54 PM | Permalink

Britain's Financial Services Authority is coming under increased pressure to allow offshore investors - mainly private equity and hedge funds - access to publicly listed sources of funding. Buyout funds in the US have difficulty accessing funds through public stock exchanges, prompting them to seek abroad for new sources of cash to feed their unlimited appetites. Publicly traded private equity funds already control an estimated USD 80 billion, but are seeking yet more through expanding in loosely regulated financial markets as 2007 is tagged as the year of the 50 billion dollar deal.

Click here to read the latest.

Posted on March 5, 2007 10:33 AM | Permalink

Union calls for regulation of buyout funds voiced on February 27 had a big impact in the UK, panicking private-equity funds into mobilizing their lobbyists and their political supporters to defend themselves against regulation. Over the past week, a series of editorials, commentaries, interviews and letters in the UK financial press have attempted to defend the funds, with the strongest reaction focused on to union calls to rectify loopholes in the tax regime that favour private-equity's debt-driven buyouts. Private-equity's extreme sensitivity to proposals to close gaps and fix inequalities in the tax regime - an issue also raised by the IUF in its calls for re-regulation - clearly demonstrates that such re-regulation can and will have a significant impact on the leveraged buyouts that are ripping through the manufacturing and services industries, undercutting employment security, undermining union bargaining power and destroying jobs.

Continue reading "UK Union debate on tax regimes panics private-equity funds" »

Posted on March 4, 2007 08:17 AM | Permalink

Speaking with the IUF to a group of trade union sponsored Labour Party MPs at the UK House of Commons on February 27, TGWU Deputy General Secretary Jack Dromey called for a Select Committee investigation into the workings of the leveraged buyout business and action to curb its destructive impact.

Click here to read the IUF presentation.

Posted on March 1, 2007 03:05 PM | Permalink

Private equity chiefs to face fresh protests
Independent, UK - Feb 25, 2007

"The leading figures of the global private equity world gathering for an industry conference in Germany today will be met with angry protests over job cuts ...."

The link to the full article is here: http://news.google.com/news/url?sa=t&ct=us/0-0&fp=45e3699c3b4eb724&ei=JK_jRaXFOMvwHJDToXw&url=http%3A//news.independent.co.uk/business/news/article2305599.ece&cid=1113725027

Posted on February 27, 2007 04:13 AM | Permalink

"THE continuing union protest over the closure of the Birds Eye fish factory in Hull has moved onto the international stage this week.

The GMB Union has flown protestors from the plant and other threatened industries to Germany to demonstrate outside the Super Return Conference in Frankfurt, the private equity industry's annual flagship event."

Read more:
http://www.fishupdate.com/news/fullstory.php/aid/6772/Birds_Eye_protest_moves_to_Germany.html

Posted on February 26, 2007 02:16 PM | Permalink

"MPs will this week be urged to launch a wide-ranging inquiry into the 'epidemic of leveraged buyouts and the damage they cause to companies and the economy'. The call comes from the IUF, an international union representing workers in the food, agricultural, hotel, restaurant, catering and tobacco industries. The IUF's Peter Rossman, one of the most respected critics of the sector, will meet with the trade union group of Labour MPs on Tuesday."

Click here to read the article in THE OBSERVER: "Permira criticises pay 'voyeurism'", Sunday February 25, 2007

Posted on February 25, 2007 10:22 AM | Permalink

Click here to watch the video interview on IUF Asia-Pacific's Asian Food Worker with Vice President Kunio Akiyama , who outlines the situation and describes the union's initial response (Japanese language, English subtitles, Windows Media Format, 8.1MB).

The following is an excerpt from the interview with Brother Tatsuya Matsumoto, Tokyu Tourist Trade Union, a member union of the IUF-affiliated Service Tourism Rengo, in the article of Hiroba Union 2006 January issue.

Continue reading "The buyout of Tokyu Tourist Corporation & its impact on unions " »

Posted on February 21, 2007 11:15 AM | Permalink

"The Transport & General Workers' Union warned yesterday about the potential Sainsbury's bid. Brian Revell, T&G national organiser for food and agriculture, said: 'Such a takeover would be based on borrowed money followed by extracting as much wealth as possible from the company ... Private equity does not create wealth; they extract it for their shareholders.'"

Continue reading: Jill Treanor and Terry Macalister, ‘Barbarians or benefactors? The rise and rise of private equity’, The Guardian (UK), February 6, 2007.

Posted on February 6, 2007 10:42 AM | Permalink