Barbarians at the gates of Europe

Private equity, venture capital or merchant banking - whatever you call it - is a hot area that banks and investors are piling into in Europe, importing US-style aggression and leverage techniques. It's not quite the fear and greed of the 1980s, but a market correction could shake some of the less prudent off their perch. Peter Lee reports.

A large European universal bank was recently trying to lure a bright twenty-something MBA graduate from a US leveraged buy-out (LBO) firm to come to work in its London investment banking business. The target proposed an unusual bargain. He would come and work for the bank if it would compensate him for giving up his share in the capital gains he expected to make from the eventual sales of companies in his current employer’s private-equity portfolio.

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