Private Capital Monitor 23/06
23rd June 2023
Silas Brown, Abhinav Ramnarayan and Paula Seligson, reporters at Bloomberg discuss the impact of many private equity firms opting against hedging in the past decade. The trio note that these “ debt-laden companies are now paying the price” and are “buckling under the strain of all the debt those firms used to buy them.”
Worth a read
Bloomberg reports KKR & Co. has “overhauled” its Asia-Pacific private equity team in the early stages of allocating capital from its $15 billion regional fund. It is widely speculated that Ming Lu, the firm’s Asia-Pacific head, will become executive chairman for the region to spend time on strategic initiatives, and Hiro Hirano will relinquish his role as co-head of private equity to become deputy executive chairman, while maintaining his role as head for Japan.
According to the latest Liquidity Index from Rede Partners, which is released twice a year, whilst the difficult conditions for private equity fundraising persist, there has been a cessation in the downward trend observed over the past year.
Jenny Surane, Finance Reporter at Bloomberg notes an analysis by recruiter Odyssey Search Partners finds private equity firms looking to fill out their 2024 associate classes were forced to do a second round of recruiting this year after initial efforts fell short. Surane recognises that in 2010, private equity firms typically waited for “junior bankers to soak up about 11 months of training before poaching efforts started”, however, “for the associate class of 2024, private equity giants began recruiting less than a month into their program.”
Media of the week
Rajiv Jain, co-founder of GQG Partners, discusses his approach to managing portfolios and building teams, as well as his views on the macroeconomic and investment landscape.
Wall of money
Wellington Hadley Harbor IV will be used to back late-stage private companies seeking capital to sustain or accelerate growth prior to a potential IPO or sale. The firm has also collected $200m of co-invest capital to commit alongside the fund. Five investments have already been made to date.
The fund is nearing its $2bn target and is on good course to reach its $2.7bn hard cap. The firm primarily targets the consumer, engineered products and services sectors, investing an initial $25m – $75m in high-growth companies and more money as follow-on capital.
The flagship is expected to continue fundraising towards its $1.75bn hard cap. The strategy acquires control and minority stakes in North American mid-market companies with EBITDA of $5 million – $20 million in software, IT and tech-enabled business services.
|Acquisition Target||Buyer||Seller||Value||Date Announced||Region||Sector|
|Delly’s||CVC Capital Partners and Patria||Patria||n/a||22/06/2023||Brazil||Food distribution|
|BTE Renewables||Engie and Meridiam||Actis||$1bn||21/06/2023||South Africa||Green Energy|
|Ellab||Novo Holdings||EQT||€1bn||21/06/2023||Denmark||Industrial Goods & Services|
|Axis Well Technology Group||RSK Group||Elysian Capital||n/a||21/06/2023||Scotland||Energy|
|Xential||Main Capital Partners||n/a||20/06/2023||Netherland||Software|
|HDFC Credila*||BPEA EQT and ChrysCapital||$1.1bn||20/06/2023||India||Education Loan|
|Foxway||Nordic Capital||19/06/2023||Sweden||IT Services|
|Cvent Holding Corp||Blackstone||$4.6bn||16/06/2023||US||Software Service|
|Vantage Consulting Group||Parabellum Investments||n/a||16/06/2023||US||Manufacturing Automation|
*subject to regulatory approvals
Movers and Shakers
- Carlyle announced John Redett will become Caryle’s new CFO and Head of Corporate Strategy, as the firm’s long time CFO, Curt Buser, announced his retirement.
- ICG appointed Mathew Cestar as its new global head of credit.
- SET Ventures has promoted Leonie Mekel to be the firm’s first CFO, with the mandate to oversee all of its operations.
- 17 Capital has elevated Nicolò Colombo and Greg Hardiman to the title of managing director.
From the Horse’s mouth
“A spike in enthusiasm for purchasing secondary stakes in PE funds can be viewed as a signal that LPs believe we have reached the bottom and are expecting valuations and performance to pick up in the medium term.” – Magnus Goodlad, Partner and head of transactions at Rede.
“Yet for all their savvy dealmaking, even the titans of private equity are getting caught out by the swift rise in interest rates — which is costing the companies they own billions in extra interest and threatens to push scores of them into default.” – Silas Brown, Abhinav Ramnarayan and Paula Seligson, Reporters at Bloomberg.
“Good manners will open doors that the best education cannot.” – Clarence Thomas, 108th US Supreme Curt Justice, born on this day in 1948.