Europe??s private equity groups should draw up a voluntary code of conduct on how profits made from deals should be split among investors, managers and staff, the head of Axa Private Equity has told the Financial Times.
The call, by Dominique Senequier, Axa Private Equity??s chief executive, comes after several deals in France triggered public uproar about multi-million euro payouts to the managers of companies sold by private equity.
The most controversial French deal was the ?2bn sale by Barclays Private Equity of Converteam, the former Alstom Power Conversion business, to LBO France, resulting in a ?700m payout to the company??s top eight managers.
A rival French private equity executive said the Converteam deal was ??a mistake by Barclays Private Equity? and had increased the risk of a legislative backlash.
Converteam??s management has committed to reinvesting much of its profits back into the company??s shares. Gonzague de Blignières, head of Barclays Private Equity in Paris, promised to pay a bonus of two months?? salary to Converteam??s 5,000 staff.
??Public opinion is demanding more transparency and ethics on management packages, so we need to be ready for this,? said Ms Senequier, who manages one of Europe??s biggest private equity funds with more than $22bn under management.
UK-based private equity groups are likely fiercely to oppose any pan-European push for increased transparency. Simon Walker, head of the British Private Equity and Venture Capital Association, said: ??We believe very much in pay for performance.?
