New Director Brings Banking Experience to BT Pension

(January 11, 2013) — The largest pension fund in the United Kingdom has appointed a trustee director with a career in investment banking to its board.

Catherine Claydon, who has more than 15 years’ experience at Goldman Sachs, has joined the pension fund, according to documents filed at the UK corporate register Companies House. A spokesman for the fund confirmed the appointment to aiCIO.

Claydon was a managing director of the bank’s pension advisory team, before leaving to join Lehman Brothers’ in a similar role in at the start of 2007.

After the collapse of the bank, she launched Claydon Advisers and has since taken several directorships at UK pension funds and listed companies. Claydon has been a member of the Unilever pension fund investment committee for almost three years and has been an independent trustee director at the Barclays pension fund since May 2011. She earned an MBA from Wharton Business School in Pennsylvania.

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

The £38 billion BT pension fund, the largest in the UK, has eight trustee directors. It already has one independent trustee from Law Debenture – David Felder – who joined in September 2011. Claydon replaces David Barford who died last year.

BT has been one of the most prominent funds in the push towards investing in real assets. Last year it joined other large UK pensions that had committed to fund long-term infrastructure projects. The fund was nominated for recognition at aiCIO‘s Innovation Awards in December last year.

In November, BT reported its pension fund liabilities had increased to £42 billion, despite cash injections of £2 billion in the third quarter of the year. A £500 million rise in asset values could not offset an increase in liabilities, the company’s financial statements said.

(January 10, 2013) – The soft deal flow for private equity as a whole last year allowed the Carlyle Group to dominate with 48 acquisitions totaling $26.87 billion.

The Washington, D.C.-based firm accounted for 10% of the industry’s total 2012 deal value, which came in at $254.6 billion, according to Preqin. Carlyle’s next closest competitor was New York-based Apollo Global Management, which invested half ($13.56 billion) the assets that Carlyle did.

“Why are we, Carlyle, pursuing all these deals when our competitors, both private equity and corporate, seem much less active?” William Conway, the public firm’s co-founder and co-CEO, asked rhetorically during a Q3 earnings call on November 8. “First, we have a larger corporate private equity business than many of our peers.” He pointed out Carlyle’s decades-long involvement in buyout and growth investing, which he said lets the firm “find investments, where others can’t. And our experience gives us the comfort to pursue investments where others won’t.” Secondly, Conway acknowledged, “the timing of some of these investments is coincidental. Examples of this are DuPont Performance Coating, Hamilton Sundstrand, and Philadelphia Energy Solutions, all of which we’ve been working on for over a year. Our business is lumpy by nature.”

Finally, Conway argued that Carlyle enjoys a financial edge over its competition. “The weighted average cost of our debt on the recent Getty Images investment was only 5.25%. The high-yield market has become a low-yield market.”

For more stories like this, sign up for the CIO Alert newsletter. 

While Carlyle excelled in 2012, the year presented more of a challenge for funds not buoyed by size, longevity, and luck. Capital—or lack thereof—proved to be one damper on the aggregate the deal flow of buyouts and growth investments.

“Fundraising continued to be very challenging in 2012, but the year ended with a slight improvement on the level of fundraising seen in 2011,” said Preqin’s Senior Manager Helen Kenyon. “With a record number of funds on the road and with the time taken to raise funds increasing slightly, the market will remain very competitive during 2013. Yet investor appetite for the asset class has remained strong and with the majority of LPs satisfied with the performance of their portfolios, it is possible that we may see some further improvement in overall fundraising levels in the year ahead.”

Investors may have just been cautious amid all the political and economic uncertainty last year, but a barrage of bad press likely did not help the (usually very private) industry. The New York Attorney General launched a tax-dodging investigation on private equity giants including Apollo, Bain Capital, Kohlberg Kravis Roberts & Company (KKR), Sun Capital Partners, TPG Capital, and Silver Lake Partners.

The third-largest dealmaker of the year, the Blackstone Group, had pointed out to regulators prior to the suit that it did not engage in the tax practice in question, and thereby avoided investigation. A lawsuit unsealed in October, however, revealed that the firm was being sued by a public pension for allegedly colluding with competitors Bain and KKR. The case—now stretching into its sixth year—is still winding its way through a Boston court.

Despite the legal trouble, Blackstone closed 33 deals across a variety of industries in 2012, worth a total of $13 billion. Riverstone Holdings and Advent International followed Blackstone to round out the year top five dealmakers. Riverstone topped Advent by $100 million to come in at fourth, adding a total of $10.94 billion to 2012’s private equity investment tally.