LONDON -- Gerard Tardy is trying to bridge the gap between the growing number of private equity funds struggling to find deals in continental Europe and European companies seeking outside capital.
The problem is the wide cultural gap between U.S. and U.K. investors and private companies in continental Europe, particularly in southern European countries. "The cultures are still very far apart," he said.
As founder and managing partner of Schroder Ventures Paris for 10 years and a former chief executive of CVC France, Mr. Tardy now has formed London-based Sitka Ltd. -- named after the Sitka spruce, which require little soil to grow into mighty trees.
Mr. Tardy plans to bring attractive, medium-sized deals to private equity funds that the funds otherwise might miss because of their newness to the market and cultural barriers. And he will co-invest alongside the deals, in a unique combination of broker and investor in the European private equity market.
Finding deals is becoming tougher, as new entrants to the European private equity market pile in every week. "Progressively, I see the power going from the people who have the money to the people who have the deals," he said.
Mr. Tardy said many funds have focused on Germany, and find it much tougher to enter the Latin markets of France, Italy and Spain, where he will focus initially. Eventually, he will expand to the Benelux countries and Switzerland, and possibly Germany if he finds the right partner there.
Later this year, he plans to raise his own fund, primarily from funds-of-funds, on the order of E80 million ($82.8 million) that would co-invest in such deals.
While some private equity partners are averse to sharing their investments, the strategy does give Sitka a long-term stake in such deals. And the size of any co-investment would be capped at the success fee, which typically is either a flat fee or 1% to 2% of total investments -- debt and equity -- in a deal.