Adjusting to new conditions

Over the past year we have operated in a different environment. Globally, corporate earnings declined further and faster than at any time since the Great Depression. Across the private equity industry, transaction activity dwindled and exits were waiting for conditions to become more favorable.

Against this backdrop we have rigorously employed our investment experience and resources to propel our portfolio companies forward. The contribution of the management teams and employees of our portfolio companies is vital to the achievement of that outcome. We would like to thank them for their work and dedication over the past year to protect and increase the value of these businesses. The economic climate has slowed progress in some areas and we have adjusted our objectives and plans to current market conditions as a result. Yet with funds available, we continue to look for attractive companies that fit our investment profiles.

Continuing to build value

Deals have been proceeding slowly in this climate due to the intensive levels of due diligence, negotiation and relationship-building required. Large deal teams with the know-how and the capacity for involvement throughout the investment cycle are therefore a competitive advantage and we have one of the best-resourced global investment platforms in the private equity industry. Despite the more complex environment for deal-making, we invested a significant amount of capital in 2009 with our proactive approach.

In the past 12 months our operating partners and investment professionals have worked closely with management teams to review business strategy and identify ways to add sustainable value in the recession.

To assist them we set up a new portfolio support group of senior managers with analytical, strategic and project management skills. Portfolio support provides extra capacity and capability to help portfolio company management deliver their business plans where needed. Our specialist debt team also structured alternative financing solutions for portfolio companies to help strengthen their businesses.

Pursuing the same goal

In closing, although our business has been affected, we have stayed true to our strategy and to the goal that has driven our business for more than 25 years – to find good companies and help them achieve a higher level of performance.

The Advent Partners

December 2009