Time was when private equity chieftains thought minority stakes were for sissies. No more. With capital scarce and megabuyouts all but extinct, PE firms are happily taking small ownership positions. On Wednesday, 3i Group plc led a consortium investing €200 million ($315.1 million) for 16% of Brussels-based medical diagnostics company Labco International. Paris buyout shop PAI Partners teamed up with former Deutsche Bank AG banker Philippe Guez to launch a Akkadia, a firm that will buy minority positions in listed midsized companies. Minority-stake deals sit well in the current climate. A troubled or expanding company gets an infusion of funds and the chance to retain its independence, while the PE firm reduces its risk and the need for hefty debt financing. But minority stake forays can attract just as much attention as full takeovers when they fail. Case in point: TPG Capital, which was publicly chastened earlier this month when it scrapped a plan to invest £179 million ($358.1 million) for 23% of mortgage lender Bradford & Bingley plc. - Laura Board
