Monitor
Private Capital Monitor 16/06
15th June 2023
PE Podium
Liam Proud writes for Reuters Breaking Views on the discounted valuations of publicly listed PE firms, noting carried interest as the lead culprit. Some firms have already begun reallocating their carry and fee-based income. Proud warns that such a shift may result in conflicts of interest between shareholders and LPs, while also posing the risk of losing staff to competitors offering higher cash salaries.
Worth a read
Despite having $1.5 trillion in unspent capital, buyout firms are struggling to close deals due to high price demands and challenging financing markets. Bloomberg reports that global deal volumes have dropped by 44% this year, reflecting the persistently challenging macro environment and uncertain business performance indicators.
The private credit sector has experienced significant growth recently, as highlighted by Private Equity News. However, the emergence of rising interest rates and the possibility of defaults by portfolio companies have raised concerns about the long-term sustainability of this trend. Industry leaders predict increased differentiation among managers as these challenges emerge.
The Financial Times reports that Italy’s top football league, Serie A, is exploring the sale of a stake in its media rights business to private equity firms, aiming to secure funding. The league is considering selling a 10-20% stake that could yield a multibillion-euro investment. However, these talks will progress only if the league fails to agree on a price with media companies like Sky and DAZN for a five-year media rights contract starting in 2024.
Media of the week
Orlando Bravo, Managing Partner of Thoma Bravo, speaks with Dani Burger at SuperReturn on private equity’s time to shine as venture capital struggles in the current market.
Wall of money
TA Associates reaches hard cap of $16.5bn for flagship fund
TA XV will target equity investments in businesses within the technology, healthcare, financial services, consumer and business services sectors.
Permira Credit raises €4.2bn for fifth direct lending fund
Permira Credit Solutions Fund V, which is already 37% invested and committed, aims to provide long-term lending to mid-market companies across Europe.
Astorg reduces target of flagship fund by 2bn
The French PE firm has settled on a €4.5 billion hardcap for its eighth flagship fund amid sluggish fundraising and M&A activity over recent quarter. The vehicle will continue to target tickets of €400m – €600m in B2B businesses across the healthcare, technology, industrials and business services sectors.
Deal Chart
| Acquisition Target | Buyer | Seller | Value | Date Announced | Region | Sector |
| Pegasus Steel | Arlington Capital Partners | – | n/a | 15/06/2023 | US | Steel Provider |
| Tom Barrow Company | Ardian | – | n/a | 15/06/2023 | US | Industrial solutions |
| Snowfox Group | Zensho Holdings | Mayfair Private Equity Partners | $621m | 14/06/2023 | UK | Food Products |
| BBS Automation* | Duerr Group | EQT | €440m to €480m | 13/06/2023 | Germany | Automation |
| New Tradition Media | Blackstone | – | n/a | 13/06/2023 | US | Media Operator |
| Solcellespesialisten | FSN Capital | – | n/a | 13/06/2023 | Norway | Renewable Energy |
| Direct Ferries | Livingbridge | ICG | n/a | 12/06/2023 | UK | Ferry Travel |
| Cleversoft | Levine Leichtman Capital Partners | Main Capital | n/a | 12/06/2023 | Germany | Technology |
| Atlantic Nickel and Mineração Vale Verde | ACG Acquisition Company Limited (SPAC) | Appian Capital Advisory | $1bn | 12/06/2023 | Brazil | Metals |
* Transaction is subject to regulatory approval
Movers and Shakers
HarbourVest appoints Vanguard’s global head of fund accounting, Peter Mahoney, as a managing director and head of fund accounting.
MidOcean Partners has appointed Ravi Saligram, former president and chief executive office of Newell Brands, as an operating partner.
Bow River Capital has recruited investment veterans, Eli Muraidekh, Aaron Arnett and Joshua Apfel to lead their newly launched credit team.
Golding Capital Partners open a new office in Milan to be led by Lara Tardino, who joins the firm as a managing director.
Maven Capital Partners has appointed Carl Edgehill and Steve Shuker as portfolio director and investment manager to expand their Midlands team.
From the Horse’s mouth
“PE firms have set a relatively high bar to saying ‘yes’ to a deal, walking away from transactions unless it’s the right deal and it’s at the right valuation level.” – Carsten Woehrn, Head of Financial Sponsors M&A EMEA at J.P. Morgan
“We hear about the golden age of private equity. This is, at least, a golden moment for private credit.” – Anthony Fobel, Founder and CEO of Arcmont
“The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.” – Adam Smith, Scottish economist and philosopher, born on this day 1723
