Maitland Private Equity Monitor – 1 December 2017

1st December 2017

Worth a read

Private equity funds find strength in numbers

Private equity groups are teaming up again in so-called “club deals” in order to buy high-priced businesses and share the mounting costs and risks associated with these firms, with Preqin data tracking their resurgence in recent years. However, it is argued here that institutional investors are becoming concerned with the loss of some direct control over the business, with OMERS’ Mark Redman agreeing. Financial Times, 28 November 2017

Amundi plans push into private equity

Amundi, Europe’s largest fund manager with €1.4trn of assets under management, has said it is seeking to raise more money for its direct investment arm as it aims to compete with the largest private equity houses. Stanislas Cuny, head of direct private equity at Amundi, said the division needs to take advantage of the firm’s deep pockets and lean on its presence and expertise in more countries across the world than most PE firms can boast. Private Equity News, 27 November 2017

AnaCap likely to ditch UK as a top tier investment destination

AnaCap Financial, the UK private equity firm specialising in financial services transactions, has said it is likely to ditch the UK as a top tier investment destination. It has blamed the falling value of the pound, pressure on consumer spending and European workers leaving the UK as factors affecting the decision. Financial Times, 27 November 2017

New era of Japan mega-deals

A recent glut in mega-deals in Japan has highlighted the increase in deal-making activity in the world’s third-largest economy, with Bain Capital’s $1.3bn takeover of Asatsu-DK a prime example. It is deemed to be a hard market by many of those watching the market, but the involvement of firms such as Bain and KKR definitely suggests it is one to watch. Private Equity International, 28 November 2017

European buy-and-build activity at all-time high

European buy-and-build activity reached an all time high by volume in H1 2017, according to data from Silverfleet Capital. In this period, 320 bolt-on deals were completed, beating the 2016 record of 302. The Nordics were the strongest region both in terms of volume and increase in activity. Real Deals, 30 November 2017

Wall of money

KKR raises $1.45bn to support growing healthcare companies

This will be KKR’s first fund focused exclusive on small but growing healthcare companies, which the firm believes are currently underserved by investors. KKR is contributing $265m to KKR Health Care Strategic Growth Fund, making it the largest investor in the fund. Private Equity News, 29 November 2017

Peak Rock steps further into credit

Peak Rock Capital is nearing its target for its credit fund alongside its second private equity fund; the Texas-based mid-market investment outfit has secured $225m for Credit Fund II, shy of its $240m goal. The firm is seeking $960m for Peak Rock Capital II, the private equity fund sleeve. So far, the firm has raised $1.18bn for both funds combined. Private Equity International, 29 November 2017

Nomura relaunches PE platform

Nomura Holdings, Japan’s largest securities company, will use $895m of its own capital to seed a Japan-focused fund that will target succession-led deals and corporate carve-outs. The firm has not yet identified targets. Private Equity International, 30 November 2017

Yukon Partners raises $558.7m

Yukon Capital Partners III held a final close at its hard cap, exceeding its initial target of $500m. This is the firm’s largest mezzanine fund to date, and will continue its strategy of providing capital to mid-market companies. Private Equity International, 29 November 2017

Argos Soditic closes seventh fund at €520m

The firm has closed Euroknights VII at €520m. Having originally planned to close the fund in Q1 2017, market uncertainty surrounding the French presidential election, regulatory issues encountered by potential backers and the shift from some LPs away from European mid-market funds delayed proceedings. Argos Soditic’s previous buyout fund, Euroknights VI, closed at €400m in 2011. Real Deals, 28 November 2017

Deal chart

Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
Nest FragrancesEurazeoTengram Capital Partnersc. $70m01/12/2017USConsumer
Eagle Eye Echo-Scan ServicesIDH Holdings, Man Capital and IFC-$25m01/12/2017NigeriaHealthcare
DRTArdianTikehau Capital€1bn30/11/2017FranceIndustrials
BBVA Real Estate AssetsCerberusBBVA€4bn29/11/2017SpainReal Estate
Verno Capital Private EquityMubadala Investment Co.Verno CapitalUndisclosed29/11/2017RussiaPrivate Equity
Rhone GroupEurazeo-$270m, 30% stake29/11/2017USPrivate Equity
Black Sea Oil & Gas SRLEuropean Bank for Reconstruction and DevelopmentCarlyle GroupUndisclosed29/11/2017RomaniaOil & Gas
4Ways HealthcareSynova Capital-Undisclosed28/11/2017UKHealthcare
Victoria Beckham LtdNeo Investment Partners-£30m27/11/2017UKFashion
svt Group GmbH-IK Investment PartnersUndisclosed, 5x return27/11/2017GermanyServices
Radius Payments SolutionsInflexion-Undisclosed, minority stake27/11/2017UKTechnology

Movers and Shakers

UK & Europe

Eurazeo has appointed Virginie Morgon as its new chief executive, to take over from current CEO Patrick Sayer in March next year. Mr. Sayer is stepping down after more than 15 years in the role. Link

Deutsche Asset Management has appointed Mark McDonald as global head of private equity secondaries in its London office. McDonald joins from Credit Suisse where he was global head of secondary advisory. Link

Baldomero Falcones, co-founder of Magnum Capital Industrial Partners, has left the firm to join Zurich-based investment advisory firm Polaris. He joins with Hanspeter Bader, Thomas Friese and Matthias Knab – from Unigestion, Nokia Group and Opalesque respectively. Link

August Equity has made a number of recent hires on the dealmaking side to replace employees who have left this year. Those hired include Richard Muckle and Kishan Chotai, who joined from Azini Capital and PwC respectively. Link

Joachim Ogland, a senior partner at London-based BC Partners, has left the firm after 14 years. Link

Jakob Tolleryd has joined Verdane Capital after founding five different technology companies in the past 20 years, including Compricer, which became part of Verdane’s portfolio in 2011. Link


From the horse’s mouth...

“Why specifically majority control? As an investor you need to retain the ability to make meaningful changes effectively, efficiently and quickly. If you invest as part of a club deal it can be significantly harder to do that.” – Mark Redman, Global Head of Private Equity at OMERS

“It’s terrifying. People are saying that it hasn’t been that bad but we have a currency devaluation of 15 per cent to 20 per cent. You have a massive challenge to an economy.” – AnaCap Financial founder Joe Giannamore on investing in the UK

“For fifty years, I have done nothing else but earn money and spend money; and it became clear that spending money gives me greater pleasure than earning it.” – Cosimo di Giovanni de’ Medici, “Father of the Nation” and first of the Medici political dynasty