Monitor
Private Capital Monitor 18/08
21st August 2023
Worth a Read
ENDLESS HOUSEWARMING: GUESTS THAT NEVER LEAVE
In a Bloomberg piece, Alex Webb explores the rising trend of private equity firms holding acquired businesses longer before selling. Many companies now change hands between private equity firms. These firms currently possess a record $1.5 trillion in unused capital, per Preqin Ltd. While selling is preferred, IPOs are being considered.
INVESTMENT (IN) BANKING
Private equity and private credit funds can expect to benefit from tighter reserve requirements regulators are placing on banks, the Wall Street Journal reports. Marc Rowan and Steve Schwarzman emphasise the collaborative nature of the relationship between banks and private equity firms, who are interested in assets rather than customers as traditional lenders look to optimise balance sheets amidst a regional banking crisis.
PULLING ON HEARTSTRINGS
The Financial Times reports EY has rejected TPG’s breakup proposal, which aimed to separate its consulting business from audit operations. TPG’s plan involved a debt-and-equity deal, following EY’s recent failed attempt to spin off its consulting arm and pursue a $100 billion valuation through a stock market listing.
FOUNDERS KEEPERS?
Institutional Investor’s Hannah Zhang explores private equity investments in lower middle market founder-owned businesses, which have gained significant steam this year despite the broader overall dealmaking slump. Impacts of the pandemic have left business owners in a position where selling to company insiders has become cost-burdensome, making private equity partnership an optimal outcome. Additionally, as the heavily baby-boomer-aged owner population reaches retirement age, there is an added sense of urgency around dealmaking.
DEAL CHART
| Acquisition Target | Buyer | Seller | Value | Date | Region | Sector |
| Arco | General Atlantic Dragoneer |
*P2P* | $1.5 billion | 10/08/2023 | Brazil | Education Software |
| ChinaData Group | Bain Capital | *P2P* | $3.15 billion | 11/08/2023 | China | Data Centres |
| Prelios | ION Group | DK Capital | €1.35 billion | 11/08/2023 | Italy | Credit Management |
| ASCO | Endless LLP | 11/08/2023 | Scotland | Material Management | ||
| Bazooka Candy Brands | Apax Partners | Tornante Madison Dearborn |
$700 million | 14/08/2023 | US | Confectionery |
| Fogo de Chão | Bain Capital | Rhone Capital | $1.1 billion | 15/08/2023 | US | Restaurants |
| Assala Energy | Maurel & Prom | Carlyle | 15/08/2023 | Gabon | Oil | |
| The Burgiss Group | MSCI | $697 million | 15/08/2023 | US | Private Asset Analytics | |
| VaccinDirekt | Impilo | SEB Private Equity | 16/08/2023 | Sweden | Vaccinations | |
| Pelago Bioscience | Impilo | 16/08/2023 | Sweden | Drug Discovery |
MEDIA OF THE WEEK
BlackRock’s Conway: Private Equity Exits Are Hard
Edwin Conway, BlackRock global head of alternatives, talks about investing in private credit. He speaks to Bloomberg’s Romaine Bostick at the Milken Institute Global Conference. (Source: Bloomberg)
WALL OF MONEY
Blackstone raises $7bn for energy transition private credit fund
Blackstone Green Private Credit Fund III hit its hard cap of $7.1bn, making it the largest energy transition private credit fund ever raised.
CVC raises over $4.45bn for sixth Asia-focused fund
According to an SEC filing and unnamed sources, CVC is targeting to raise $6 billion for the fund, its sixth and largest to date for the region.
Guggenheim targets $1.5bn for private credit fund
Bloomberg’s sources have revealed that the firm has already started discussions with potential investors, with executives Joe McCurdy, Kevin Gundersen and Rusty Parks leading the fundraising effort.
MOVERS AND SHAKERS
- Eaton Partners has broadened its private capital advisory services by bringing on board a team of four from Credit Suisse, spearheaded by Dirk Jonske. Jonske will lead the capital placement agency and fund advisory company’s newly established GP solutions division.
- Johan Pålsson has immediately stepped down from his role as a managing partner of the buyout division at Finland’s private equity company CapMan and exited the firm’s leadership team.
FROM THE HORSE’S MOUTH
[Commenting on the impact of baby boomers reaching their retirement age on lower middle market deal activities] “You’ve got multiple years of business owners who wanted to come to market but can’t, and then you’ve got this huge baby boomer transition underway. It’s stacking up…. Family-owned businesses are really the only thing of volume in the market, because [founders] don’t want to wait another 10 years for the next cycle.” – Sean Mooney, founder of private equity consulting and solutions provider BluWave.
“The lack of resource and funding for NHS mental health services means that we have become increasingly reliant on outsourcing services to private healthcare firms, as is often the case with prison healthcare” – Andrew Molodynski, psychiatrist and mental health lead at the BMA.
“It is more sinful to conceal the power of the atom than it is to reveal it.” – Sterling Cole, American politician who served as the first Director General of the International Atomic Energy Agency from 1957 to 1961. Born on this day in 1904.
