Chapter 14: Private Equity Investment in the European Ferry Market
14 Private equity investment in the European ferry market* Alfred J. Baird 1 Introduction The entry of private equity funds (PEFs) into the European ferry market is a relatively recent phenomenon. Hence this issue has not been researched to any significant degree, until now. This study aims to provide an initial analysis of PEFs acquiring ferry companies in Europe. First an overview of private equity funds is given, followed by discussion of the pros and cons of PEF investment. Then the ferry operators that have been acquired by PEFs are considered. Through case studies concerning the various transactions involving ferry lines acquired by PEFs it is possible to establish certain common characteristics that are evident. The conclusions outline the main findings and suggest issues and questions for further research. Literature specifically concerning the subject of PEFs acquiring ferry companies is at best very limited, which in turn makes this chapter quite timely and necessary. The methodology here therefore includes significant reference to trade/industry press, supported by meetings with some of the ferry company managers and PEFs involved. 2 Overview of private equity funds Private equity is medium- to long-term finance provided in return for an equity stake in potentially high-growth unquoted companies (PricewaterhouseCoopers, 2004). Private equity provides what can be termed long-term, committed share capital in unquoted companies. PEFs are unlisted funds that raise capital from institutional investors. That capital is then used to ‘shop’ for assets that fit the fund’s description and aims. PEFs, in other words, use institutional...
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