APAX PARTNERS, Europe’s second-biggest private equity firm, is making significant job cuts in a restructuring that could eventually result in the loss of about one in five of its investment staff, The Times has learnt.
The private equity firm, which employs about 160 investment staff in Europe, second only to 3i Group, is in the process of cutting between 20 and 40 jobs as Martin Halusa, Apax’s chief executive, prepares to take over as executive chairman in August.
The cuts form the second major restructuring at Apax in recent weeks, as Herr Halusa starts to stamp his mark on a company that has been run for 32 years by Sir Ronald Cohen, its outgoing chairman and founder.
Last month it emerged that Apax, currently pursuing Woolworths, was moving away from the kind of start-up deals that made its name and which built Sir Ronald’s reputation as the Godfather of European early-stage investing, in favour of bigger deals.
The change in strategy came after potential investors in the €4.5 billion (£3.1 billion) fund that Apax is raising voiced concerns that it would spend too much time working on deals of less than £10 million, which represent a tiny fraction of the fund and take proportionately much longer than larger buyouts.
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But while Apax may have appeased its investors by agreeing to cease its smallest projects, it has angered some by being secretive about its job-cutting.
One investor said: “Some investors are surprised and annoyed that they were not told (about the cuts). When we made inquiries with Apax after hearing the rumours they told us very little.”
An adviser to some other Apax investors added: “Martin Halusa is a very shrewd fellow, and he needs to be because there is insurrection in the ranks.
“No one is being told what is happening to Sir Ronald’s stake in Apax after he leaves, and there is tension between Apax’s buyout team — which invests most of the money — and the venture capital (early-stage) team.”
The eventual number of redundancies will not emerge for several months because the cuts are being made on a piecemeal basis and will fall across Apax’s European operation, affecting Italy, France, Germany and Spain as well as the UK.
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A spokeswoman for Apax said: “Given that a new fund requires a ten-year commitment from team members . . . it was agreed with six members of the investment team that this would be the right moment for them to pursue other opportunities.”
But other sources said that the eventual job losses would be much higher than six and pointed out that, in London alone, roughly eight staff had already been shed, with as many more job losses to follow.
Analysts were not surprised to learn of the cuts because Apax has a much bigger team of European investment staff than key rivals with similar-sized funds. CVC Capital Partners, Permira, Cinven, BC Partners and Candover all manage multibillion-dollar funds but only employ between 22 and 90 investment staff each.
Although Apax needs more staff because it does more relatively time-consuming smaller deals, its overheads are still widely considered to be too high.
Apax is lobbying Woolworths’ shareholders after the retailer’s management rejected an indicative takeover offer.