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TPG shakes up European team

The firm’s European co-chair is stepping down to concentrate on deals, while other high profile partners are leaving or moving to part-time as the firm shifts its European focus in response to the continent’s volatile marketplace.

TPG Capital is making some big changes to its European team amid a slowing buyout and M&A market, a source told Private Equity International.

Partner Philippe Costeletos will step down as co-chair of the firm’s European team to focus more on deal sourcing. Karl Peterson, who re-joined TPG in 2004 after a stint as CEO at portfolio company Hotwire, will be the sole European chairman.

In addition to Costeletos’ changing role, London-based partner Matthias Calice will leave the firm at the end of the year. It is unclear where Calice will go after his departure. Calice joined TPG in 2003, having previously worked at Apax, and led deals including the buyout of Greek mobile phone company Tim Hellas by TPG and Apax.

Media reports have also indicated that Vincenzo Morelli, one of TPG's highest profile operating partners in Europe, will work part-time going forward.

“It really is a question of a different focus,” the source said, indicating that firm’s European strategy will target more distressed deals as opposed to buyouts. 

A spokesperson for TPG declined to comment.

Europe’s sovereign debt crisis has stymied firms’ abilities to source deals, according to several reports. Credit markets have been paralysed by the crisis, creating an environment in which it is very difficult to acquire enough leverage for buyouts. 

TPG’s adjustment to Europe’s troubles comes on the heels of Vestar Capital Partners’ announcement that it has closed its European offices in Paris, Milan and Munich to refocus their strategy on the US mid-market. The firm marketed its most recent fund, Vestar Capital Partners VI, as targeting management buyout, growth equity and recapitalisation transactions in the US and Europe, according to documents from the 4 November 2010 meeting of the Washington State Investment Board.

“More than a decade ago, we saw an opportunity in Europe and successfully pursued it,” Vestar managing director Robert Rosner said in a statement. “However, markets change, so we need to remain flexible and adapt our model.”