Monitor

Private Capital Monitor 04/08

04th August 2023

Worth a read

Where’s My Trust Fund?!

Financial Times reports Brookfield Asset Management and Sequoia Heritage, a $16bn fund that manages the wealth of Silicon Valley, are investing $250mn each to fund a new company called Pinegrove Capital Partners, according to familiar sources. The pair will each own a 50% stake in the investment vehicle, created to capitalise on plunging valuations of venture capital-backed companies.

Back to the Future

At Apollo’s second-quarter results, Marc Rowan, CEO, warned buyout groups must “go back to investing in the old-fashioned way” as the lucrative age for private equity buyouts has ended. Rowan argued a decade of “money printing”, fiscal stimulus and low-interest rates that had pulled forward economic demand “is in retreat”. His warning comes as Apollo Q2 results revealed an adjusted profit of $1.1bn during the quarter, slightly beating consensus estimates and nearly 60% higher than the same quarter a year before.

The Rule of Rules

The Wall Street Journal reports the Securities and Exchange Commission (SEC) is preparing to adopt a rule package as soon as this month. Commentators have said it aims to bring greater transparency and competition to the multitrillion-dollar private funds industry. Following attempts to “stymie the agency’s plans”, SEC officials have acknowledged that the industry is gearing up for a court battle.

Depths of Despair

Financial Times reveals only 34 companies were publicly listed in Europe in the first half of this year, the lowest number since 2009. Nikou Asgari, reporter, notes “many businesses are choosing to float in the US instead, enticed by its larger pool of capital and investors who are more eager to take risks and fund new businesses.”

Scraping the Barrel

Pitchbook data reveals in the first half of this year, the median time between fund launch and the final close for vehicles that closed was 15.8 months.  The median for the whole of 2022 was 12.5 months. If the trend continues for the rest of year, it could be the longest median fundraising time for any year since 2013.

Who’s my Coach?

Private Equity News reports the private markets industry has acquired ownership stakes in more than a third of all of Europe’s top football clubs, according to a new report which sheds light on how buyout bosses have been “quietly muscling” into the world’s most popular sport. Pitchbook data reveals deal value in Europe’s ‘Big Five’ football leagues has grown from €66.7m in 2018 to €4.9bn in 2022.

Media of the week

Bain: Private equity has been waiting to exit due to uncertainty in the market

Watch the video here

Deal Chart

Wall of Money

Bill Gates’ Breakthrough Energy Ventures launches Fund III

Bill Gates’ climate venture firm Breakthrough Energy Ventures has launched its third flagship fund, according to a market source and an SEC filing. The Gates Foundation’s climate venture fund raised $1.25bn for its second vintage in 2021 and $1bn for its first vintage in 2019 from billionaires including Jeff Bezos, Mukesh Ambani, Michael Bloomberg, Richard Branson and George Soros. Last year, Gates said Fund III would aim to raise $1 billion.

CVC’s Glendower Capital raises $5.8bn for firth secondaries fund

Glendower Capital Secondary Opportunities Fund V is the first fund closed since its strategic merger with CVC in 2022. Glendower operates in the private equity secondaries mid-market. The fundraise reached its hard cap and attracted investments from over 230 returning and new LPs.

Whitehorse Liquidity Partners closes fifth flagship at $5.3bn

Whitehorse Liquidity Partners V LP exceeded its $5bn target, attracting investors that include both public and corporate pension plans, insurance companies, consultants, family offices and financial institutions. Whitehorse’s existing investor base contributed to 85% of re-ups. This is Whitehorse’s largest fund to date.

Bain Capital closes insurance-focused fund at $1.15bn

Bain Capital inaugural insurance fund will target corporate carve-outs and buy-and-builds in the insurance sector. The fund closed above its $750m target and is the GPs fourth specialised strategy after impact, life sciences and growth tech. The fund will invest in ticket sizes of $50m – $200m across 12 – 14 deals in North America and Europe.

Movers and shakers

• Warburg Pincus has appointed Andrew Sibbald, chairman of Evercore Partners’s London-based business, as a Managing Director and the private equity firm’s new Co-Head of Europe.
• Palatine, UK-based mid-market GP, has appointed Rachael Taplin as investment manager for its Impact Fund, based in its Manchester headquarters.
• Simon Lussi, partner at Capvis, has left the company to join Bregal Unternehmerkapital as Head of Switzerland.
• HCI Equity Partners has announced a planned management reorganisation. Dan Dickinson, Managing Partner, will transition to the role of Executive Chairman. Doug McCormick, Managing Partner and Chief Investment Officer will now lead the firm, and will be joined by Scott Gibaratz, Partner, and Bob Hund, Operating Partner, to lead HCI’s operations, investments and strategic direction.

From the horses mouth

“This is probably the single largest and most impactful of all the things that the SEC is doing” – Drew Maloney, president of the American Investment Council, which represents private-equity firms such as Blackstone, Apollo Global Management and Carlyle.

“Financial literacy . . . has actually gotten quite sloppy” – Marc Rowan, CEO of Apollo Global Management, commenting on what many have dubbed a “golden age” for private debts.

“Structurally, US capital markets are more attractive to risk capital”…. [and Europe is struggling with a] “structural lack of competitiveness” – Richard Spilsbury, UK capital markets partner at PwC.

“If I don’t practice for a day, I know it. If I don’t practice for two days, the critics know it.” – Louis Armstrong, Jazz Musician, born on this day in 1901.