Monitor

Private Capital Monitor 19/05

19th May 2023

PE Podium

Catching the fish of the day

Marc Rubinstein, a former hedge fund manager and opinion writer at Bloomberg, asserts that banks’ ongoing challenges have paved the way for private equity firms, such as Apollo and Blackstone, to thrive. Rubinstein contends that the prevailing “crisis afflicting regional banks” has curtailed their profitability while concurrently affording private equity firms the opportunity to adeptly fill the void. Rubinstein asserts that this pattern will endure, as private equity firms skillfully leverage the prospects emerging from the banking sector’s predicament.

Worth a read

Drama Queen

Merryn Somerset Webb, senior columnist for Bloomberg Opinion, argues that whilst there are concerns raised about transparency and fees in private equity, “things have perked up (slightly) in the sector in the last few months”.  Somerset Webb argues “If there are good portfolios knocking around at good discounts, buying them is surely easier than building new ones”.

Belligerent buyouts

Helen Cahill, M&A and Restructuring Correspondent at the Times, reports discounts on listed funds are anticipated to result in hostile takeover attempts by private equity firms. Cahill notes challenging conditions faced by the banking sector, including regulatory burdens and low-interest rates, have opened the door for firms like Apollo and Blackstone to offer credit and fill the void left by banks.

An extended family

The Wall Street Journal notes Bain & Co asserts consolidation is on the horizon for the private equity industry. Bain reported the number of strategic acquisitions announced or made by the world’s 50 largest alternative-asset managers more than doubled from 2020 to a decade high of 25 in 2021. Hugh MacArthur, Bain’s chairman of private equity, predicts the trend will accelerate over the next two to three years, particularly among publicly traded firms.

Media of the week

Dry Powder: The Private Equity Podcast

This episode – Inside the race to tokenize capital with HgCapital Trust’s Jim Strang.

Episode here

Wall of money

One Equity Partners seals $1bn continuation fund

The mid-market firm, One Equity Partners, has closed a continuation fund that will be co-led by HarbourVest Partners and AlpInvest Partners, a Carlyle Group subsidiary.

Morgan Stanley IM raises $500m for climate private equity strategy

1GT is focused on investments in growth-stage companies that will seek to collectively avoid or remove one gigaton of carbon dioxide-equivalent emissions from the Earth’s atmosphere from the date of investment through to 2050.

Pearl amasses over $700m for its largest fund to date

Dallas-based energy private equity firm, Pearl Energy Investments, has collected $705m for Fund III. Investments usually range from $25m to $105m in North American energy companies.

Deal Chart

Movers and Shakers

• Following his resignation as WeWork CEO on Tuesday, Sandeep Mathrani has joined Sycamore Partners as a director to lead its real estate strategy.
• HarbourVest Partners has named Javier Rodriguez as Managing Director and Head of Client Operations

From the Horse’s mouth

“Apollo has shown up around all but one of the banks that have failed this year, as well as others that are struggling… The firepower that Apollo and firms like it can bring to the banking industry is immense” -Marc Rubinstein, a former hedge fund manager and opinion writer at Bloomberg.

“If there are good portfolios knocking around at good discounts, buying them is surely easier than building new ones” – Merryn Somerset Webb, senior columnist for Bloomberg Opinion.

“Remember, the storm is a good opportunity for the pine and cypress to show their strength and stability”  – Ho Chi Minh, Vietnamese communist revolutionary & President of North Vietnam – born on this day in 1890.