Private Capital Monitor 07/07
07th July 2023
Bloomberg reveals Apollo Global Management Inc. has for the first time revealed the carbon emissions linked to some of its investments. Apollo teamed up with carbon accounting platform Persefoni to make this rare step in the alternative asset management industry.
Worth a read
Paul J. Davies opines for Bloomberg on the hesitation of Limited Partners (LPs) to commit to new funds. Davies notes moving interest rates and the rising cost of debt due to inflation are making it hard for private equity firms “generate cash and keep their heads above water”. Davies stresses that whilst private equity firms “live to do deals”, with “sales grinding to a near halt, the whole machine looks like it could be seized up for quite a while yet”, admittedly a tough pill to swallow for fund managers, investors and bankers.
Amid a sharp downturn in private equity dealmaking, The Times reports speculation is growing that the£4bn sale of Center Parcs will be shelved, as “two of the favourites” CVC and Blackstone are no longer running in the race, according to sources close to the process. KSL Capital Partners, the private equity firm which bought the Pig Hotels chain last year, is reportedly still left in the process, according to another anonymous source. The sales process, they claimed, is “wobbling”.
Helen Thomas opines for the Financial Times on the leaks caused by the UK’s privatisation of water in 1989. Thomas argues that given population change and a changing climate, the regulatory structure needs a refresh. Thomas notes whilst “listed groups are less geared and have made a better start at tackling problems with ailing infrastructure” “there are no easy answers”. Thomas urges the market to start “considering who shows themselves to be a responsible owner, and the apparent restraining influence of the public equity markets” to begin untying the square knot.
Media of the week
Blackstone CFO Michael Chae tells us why Blackstone is well-positioned for a high-rate environment. He also believes that AI will further the edge private markets have over public markets.
Wall of money
Atlas Partners Holdings III will target five to seven businesses to own and grow, with deal sizes varying from $400 million to $1 billion. Atlas will continue its focus on the healthcare, business services and specialized industrial sectors. LPs include the Alaska Permanent Fund and the San Mateo County Employees’ Retirement Association.
Hitting its hard cap, CVC CLO Equity III will be used to make equity investments in CVC-managed CLOs issued in the US and Europe. In aggregate, CVC Credit has now raised $1.66 billion of capital across its three CLO equity funds.
H=NextPower V ESG, a 10-year Article 9 fund, focuses on solar and battery storage assets across OECD countries. The fund targets mid double-digit returns while contributing to the decarbonisation of the power generation sector, reducing electricity prices and increasing energy security.
|Medica Group||IK Partners||–||£269m||07/07/2023||United Kingdom||Telemedicine services|
|Nomios||Keensight Capital||IK Partners||n/a||27/06/2023||Netherlands||Cybersecurity|
|SEC Newgate||Investcorp||Three Hills Capital Partners||$100mn||03/07/2023||Italy||Communications|
|Anthesis||Carlyle||Palatine||$400mn||30/06/2023||UK||Business Support Services|
|Software AG||Silver Lake||n/a||$2.4bn||03/06/2023||Germany||Software|
|American Equity Investment||Brookfield||n/a||$4.3bn||05/07/2023||US||Life Insurance|
|Avrio Energie||Deutsche Beteiligungs||Leyendecker Group||n/a||05/07/2023||Germany||Green Energy|
Movers and Shakers
- Oaktree Capital Management has named Robert O’Leary and Armen Panossian as co-chief executive officers, following Jay Wintrob’s departure.
- Hg has hired Thoma Bravo’s head of tech, Paul Zuber, to help drive its activity in North America.
- BC Partners has promoted the firm’s head of technology, Brian Mason, to group CTO.
- Bridgepoint has appointed Hamish Massie as VP, fund finance.
From the Horse’s mouth
“It’s a fantastic business, but the problem is that it’s fairly dry — there’s not a lot of juice…There’s not a lot to do to drive value and you can’t guarantee that you’re going to get a new site. I wouldn’t be surprised if they pulled [the sale] — Brookfield doesn’t need to sell right now.” – an unnamed insider on the sale of Center Parcs.
“In essence, what’s needed at Thames, if the owners wish to save it, is a large rights issue or debt-for-equity swap. The stock market tends to be good at such exercises. It cuts to the chase.” – Nils Pratley, Financial Editor, The Guardian.
“Compassion and tolerance are not a sign of weakness, but a sign of strength.” – The 14th Dalai Lama, born on this day in 1935.