Corporate Finance – MBA 8020
Summer 2016

Palamon Capital Partners/Team System S.p.A

Introduction:

Palamon Capital Partners is a generalist private equity firm that invests in existing companies that are not mature, and operates in the United Kingdom, and founded in 1999 with initial raised funds of EURO 440 Million. The company aims 35% return on a single portfolio investment, and 20-25% blended portfolio net return. The firm’s plan is to gain control of shares in the companies after thorough screening process, and an investment possibility of approximately six years with a carefully planned exit strategy. The company doesn’t focus only a certain industry or country, and promises to provide both management and consulting services to its companies. TeamSystem S.p.A is an Italian based Software Company that does tax, payroll and accounting services. The company was founded in 1979, and its industry is broken and often under a regulatory change. TeamSystem controls 14% of the market with 28,000 clients and have high customer retention rate. (T-2nd most).
Private equity investments are capital invested in public which are not quoted on public exchange and are in private placement basis and are not in public markets. Also, private equity managers use negotiations for holding a large number of shares, joining in monitoring and advising for companies where funds invested in, gain their benefit by premium, bonds earnings. This technique gives them the opportunity to increase returns by openly manipulating the company and ultimately generating value creation and the eventual exit from the investment. Depending on investment goals and portfolio’s size, investors might choose their investment method by investing directly or using funds of funds.

Problem Formulation In February 2000, Louis Elson, the managing partner for Palamon Partners