Monitor
Private Capital Monitor 15/12
15th December 2023
WORTH A READ
Europe
Citywire speaks to Eurazeo’s Luc Maruend, the head of wealth solutions on the pricing pressure, as private equity firms increasingly target retail investors. Maruend asserts new EU rules, designed to ensure investment products provide real value for money will lead to increased pressure on fund managers.
Sustainable Views discusses the integrity of and confidence in sustainable investment, following the UK publishing its first code of conduct for ESG ratings and data products providers.
Alphaville, The Financial Times’ financial blog, examines BlackRock’s 2024 private markets outlook, which was released this week. The analysis reveals BlackRock’s estimate that the “dry powder” in the private capital industry has reached the $4 trillion mark.
United States
Private equity deals in the music industry have slowed considerably the last two years, with interest rates rising and investors unable to saddle such assets with as much debt as before. Prices for songwriting catalogues have fallen by 14 percent from their 2019 peak, and music is generally seen as a less liquid and less well-understood asset class.
Meanwhile, the commercial services sector has shown resilience amid the broader dealmaking slump, accounting for roughly 14% of all PE transactions tracked by The Deal this year. Consistent activity and stable enterprise value multiples have kept these companies attractive for financial and strategic buyers.
One factor that could contribute to a turnaround for the PE sector is a higher allocation to the asset class from wealthy individuals and family offices, writes Barron’s. KKR and other firms are seeing a higher percentage of the capital they raise coming from individual investors.
WALL OF MONEY
KKR targets $7bn for inaugural global climate fund
The firm is looking to hold a first-close in the first half of 2024, seeking to invest in energy storage, battery-related ventures and transportation, as well as the decarbonisation of existing assets like conventional power and infrastructure. Ticket sizes vary from $300m and $750m, investing across the US, Europe, and Asia-Pacific.
Ara partners collects $3bn for industrial decarbonisation fund
Surpassing its $2 billion target, Fund III will pursue both buyout and growth investments in companies with the potential to cut carbon emissions, aligning with the firm’s objectives. The fund will invest in North American and European industrial companies in sectors like manufacturing, chemicals and materials, energy efficiency, green fuels, and agriculture that can contribute to reduced emissions.
Oaktree to reach $3bn final close for third special situations fund
Oaktree’s newest special situations fund is said to be nearing $3 billion. The fund plans to invest in companies facing financial difficulties or high debt burdens. Investments are intended to range from $125 million to $150 million, focusing on mid-market companies in North America. The potential deals could involve structured equity, direct equity, and secondary debt acquisitions.
Amundi launches European agricultural and agri-food private debt strategy
Amundi Ambition Agri-Agro Direct Lending Europe has a target of €750 million and has already received €130 million from Crédit Agricole Group. The strategy aims to finance European companies in the agricultural and agri-food sectors.
Pictet announces final close at $320m for thematic health strategy
The strategy will invest in therapeutics, diagnostics, digital health, medical technology, and healthcare and services providers. Initial investments have been made in biotechnology and healthcare-focused venture capital, growth, and buyout funds, with a substantial portion remaining to be allocated to co-investments across the five segments.
DEAL CHART
| Acquisition Target | Buyer | Seller | Value | Date | Region | Sector |
| Shearer’s food | CD&R | Ontario Teachers’ | – | 13-Dec | US | Food manufacturing |
| Exercite | Epassi Group (TA Associates & Warburg Pincus) | Waterland | $1 billion | 12-Dec | Germany | Corporate health & wellness |
| TopDesk | CVC | – | €200 million | 12-Dec | The Netherlands | Service management software |
| TaxModel | Tax Systems (Bowmark) | – | – | 12-Dec | The Netherlands | Tax technology |
| Corsair Capital (infrastructure) | Investcorp & Corsair Capital | Corsair Capital | 4.8 billion | 11-Dec | US | Infrastructure |
| Outcomes First | TPG | – | $1 billion | 11-Dec | UK | Special educational needs |
| GGW | Permira | Hg | – | 8-Dec | Germany | Insurance broker |
| Medexprim | BC Platforms | – | – | 7-Dec | France | Medical data |
| Smart Metering Systems | KKR | *P2P* | £1.4 billion | 7-Dec | UK | Energy infrastructure |
MEDIA OF THE WEEK
Marc Rowan, CEO at Apollo, says, “if you actually want alpha, outperformance, you need to step away from public markets, as he says it’s getting harder for active managers to beat indexes in public markets.
MOVERS AND SHAKERS
- Goldman Sachs is reorganising top executives within its private credit division with the goal of doubling the size of the business in the medium term. Greg Olafson, currently co-president of alternatives, will take on the role of global head of private credit. James Reynolds is set to become global head of direct lending. Meanwhile, Kevin Sterling will serve as global head for investment-grade private credit and asset finance.
- Clayton, Dublier & Rice has announced three new partners Sid Jhaver, Jon Selib and Bill Berutti.
- Metric Capital Partners has made two promotions with Louis Robert becoming partner and Lars Eriksson managing director. The two are based in Paris and Stockholm respectively.
HORSE’S MOUTH
[Discussing the relationship between retail investors and private equity] “This needs some education because this asset class is really new and most clients know euro funds that are solutions provided by the insurer with a 3.5% return guaranteed with no risk. French clients have been drugged with this product for a long time.” – Luc Maruenda, Head of Wealth Solutions, Eurazeo.
“The first of all commodities to be exchanged is labour, and the freedom of man consists only in the exercise of the right to determine for himself in what manner his labour shall be employed, and how he will dispose of its products.” – Henry Charles Carey, American economist (Principles of Poli Economy), born on this day in 1793.
