BarCap recruits buyout star Lovering

John Lovering, the manager behind some of the UK’s most successful private equity deals, is joining Barclays Capital as vice chairman, as the UK investment bank looks to strengthen its offering to its lucrative private equity clients.

Lovering will work alongside Roger Jenkins, the head of principal investing and private equity. BarCap, the investment banking arm of UK bank Barclays, does not try to compete directly with its buyout clients, like some of its rivals, but will often co-invest alongside them on large deals while also providing debt facilities.

Lovering has made a considerable fortune in the buyout arena – more than £20 million, according to some estimates – thanks to his managerial involvement in a number of highly successful private equity-backed buyouts, including UK furniture store Homebase, cinema chain Odeon Cinemas, and gym operator Fitness First. He is currently chairman of Somerfield, the supermarket chain bought in a £1.1 billion deal by Apax Partners, Barclays Capital and entrepreneur Robert Tchenguiz in 2005 and also Peacocks, the flourishing UK retailer bought by his own vehicle Echelon Capital alongside hedge funds Och-Ziff and Perry Capital in the same year.

Perhaps his most high-profile role in recent years has been as chairman of Debenhams, the UK retailer taken private by CVC Capital Partners, TPG and Merrill Lynch Private Equity in 2003 for £1.7 billion. Lovering was part of the management buy-in team behind the subsequent restructuring of the company, which became one of the most profitable private equity deals on record. However, his largely unblemished record has been tarnished slightly by the retailer’s lamentable performance since being re-floated last year. Its share price has fallen by almost a third, amid concerns about the debt levels introduced by its private equity owners.

As part of his appointment, Lovering’s own vehicle Echelon – which only closed its most recent fund earlier this year – will be effectively wound down. His two partners, Nick Heslop and Paul Morris, will join Barclays Capital as directors, while the vehicle will no longer do deals independently.

Barclays also has a captive mid-market buyout arm, Barclays Private Equity, which has almost finished investing its €1.65 billion second fund, closed in 2005.