Maitland Private Equity Monitor – 13 April 2018

13th April 2018

Worth a read


Norway’s wealth fund blocked from investing in private equity

The private equity world has been left shaking its head in bemusement (and some relief) as Norway refused (yet again) on Tuesday, to send its $1trn sovereign wealth fund to the private equity ball. A major sticking point for Finance Minister, Siv Jensen, was private equity’s lack of transparency. Norway has become something of an anomaly among other countries whose major funds pour vast amounts into private equity. Though it’s not all bad news: for extant investors, the competition has just diminished to the tune of $1trn. Financial Times, 10 April 2018

Buyout funds eye European banks’ payment companies

It’s turning into a battle of the banks and private equity funds: each wants a piece of European banks’ payment companies. Due to the uptick of consumers’ payments by card and phone, there is a real appetite to acquire the payment companies, many of which were established by banks. Though there have been a raft of large acquisitions by funds (such as Hellman & Friedman’s $5.3bn takeover of Nets in Denmark), commentators caution that it is difficult to determine whether the banks, many of which have developed these payment programmes, will actually sell off their companies. Financial Times, 11 April 2018

 

Apollo Makes a Brave Move With Jeremy Corbyn In View

Much stamping of foot at FirstGroup, transport conglomerate, after US private equity fund, Apollo, made a mid week bid for the British company. Apollo’s bid has been derided as “opportunistic” and at a value that “fundamentally undervalues the company“. The optics are ripe for a political showdown: a British transport company pitted against a giant American fund. How the Labour party will be chomping at the bit should drivers’ jobs be threatened as part of any restructuring. And should he gain power, Jeremy Corbyn has pledged to renationalise the railways. Cue much political harrumphing.  But investors haven’t had much truck with that recently: for the past month, FirstGroup’s shares have been driven up by 30% amid bid speculation.  Bloomberg, 12 April 2018

Wall Street In 2018: It's Time To Pay More Attention To Private Equity Stocks

Investing in private equity stocks has been hitherto overlooked in favour of investing in safer stocks on Wall Street, like Goldman Sachs, according to Forbes.
Currently, private equity stocks generate superior returns on equity, operate in a net cash position and have no debt due until 2019. A transformation from companies to corporations has been mooted due to tax reforms and succession plans at various private equity houses. The article considers that such a change will render the private equity stocks more appealing than Wall Street.  Forbes, 11 April 2018

U.S. private equity firms turn to 'bolt-on' deals for an edge

‘Buy and build’ is a phrase which has been coursing through the private equity world of late. Across the pond, buyout funds have found a way of combatting increasing deal prices and the onorous leverage curtailing regulation. . It’s a sort of buy one get one free(er): you buy one company with your own funds; then you use that company as a jobbing horse to buy more companies in the same sector. That way, the fund’s ultimate holding increases in both scale and pricing power. In January-March of this year, 70% of leveraged buyouts were tacked onto private equity portfolio companies, an uptick on 67% in 2016.  Reuters, 12 April 2018


Wall of money


Neuberger Berman Arm Secures $4.6 Billion So Far to Buy Stakes in Private-Equity Firms

Neuberger Berman Group has raised $4.6bn for a new fund to buy stakes in private equity firms. This increases Dyal Capital Partners’ assets under management to over $13bn and demonstrates that the firm is betting on the industry continuing to outpace public markets. Private Equity News, 10 April 2018

ICG seeking $1.6bn for end-of-life solutions

ICG is targeting $1.6bn for its latest secondaries fund, a year after its last secondaries vehicle closed on $1.1bn. The new fund will focus on end-of-life restructurings in Europe and North America, as well as buying private equity portfolios. Private Equity International, 10 April 2018

CPPIB Spin-out AlbaCore Raises €1.5 billion For Debut Credit Fund

AlbaCore Capital, a credit firm set up by former CPPIB managing director David Allen, has raised €1.5bn for its maiden fund, becoming one of the largest first-time credit funds. Its success highlights investor appetite for the asset class which raised $52.7bn last year, the highest amount since 2008. Private Equity News, 6 April 2018

Montana raises €800m for fourth secondaries fund

Montana Capital Partners has closed its fourth secondaries fund at €800m after five months, eclipsing its predecessor which closed at €406m in 2015. The Swiss firm, which focuses on small or complex transactions, said the fund was highly oversubscribed. Real Deals, 11 April 2018

Axcel’s €617m fundraise shows the importance of clear succession planning

Axcel has closed its sixth fund at its hard cap of €617m. The fund surpassed its €550m target and is around €135m larger than its predecessor, which closed at €485m in 2010. The firm managed to retain investors despite a change in leadership. Real Deals, 6 April 2018


Deal chart


Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
Ainsworth Pet Nutrition LLCJ.M. Smucker CoL Catterton$2bn, 8x return12/04/2018USAFood
U.N. Ro-RoDFDSActera Group and Esas Holdings€950m12/04/2018TurkeyInfrastructure
WestleighCountryside PropertiesPalatine Private Equity£135.4m, 3x return12/04/2018UKConstruction
GeotechMobeus Equity Partners-£14m12/04/2018UKInfrastructure
Soest Medical GroupArchiMed Group-Undisclosed12/04/2018NetherlandsHealthcare
Broadnet HoldingEQT Infrastructure IIIEQT Private EquityUndisclosed12/04/2018NorwayTMT
The Access Group LimitedHgAccess Group LtdUndisclosed12/04/2018UKTMT
Genebre SA-Metric Capital PartnersUndisclosed12/04/2018UKManufacturing
European Camping GroupOntario Teachers' Pension PlanCarlyle Group and MontefioreUndisclosed11/04/2018EuropeTravel & Leisure
VDM GroupAperamLyndsay GoldbergUndisclosed, 3x return11/04/2018GermanyManufacturing
Phaidon InternationalQuilvest Private Equity-Undisclosed11/04/2018UKRecruitment

Movers and Shakers


UK & Europe

Calum Paterson, Managing Partner of Scottish Equity Partners has begun his year as Chair of the BVCA. He takes over from Helen Steers, Partner at Pantheon Ventures. Link

Apax Partners has established its first international office in Milan and hired Francesco Panfilo, former Managing Partner at Italian mid-market buyout house PM & Partners. Link

PSP has hired two dealmakers for its team in London, with Matthias Osthoff and Philipp Schröder joining from Bain Capital and Deutsche Bank respectively. Link

Nordic buyout firm Altor has promoted Thomas Kvorning, Andreas Källström Säfweräng and Maria Tallaksen to Partner. They have been with the firm for 11, 12 and 11 years respectively. Link

PAI Partners has said that it plans to hire up to 15 new investment professionals in Europe to help with the deployment of Fund VII. Link 

C5 has named Christopher Cooke as Managing Partner, joining from investment bank Hycroft. Link

North America

Salveo Capital has appointed Thomas Mazarakis as a Managing Partner, joining from Goldman Sachs in London. Link

Other

Intermediate Capital Group (ICG) has appointed Ryan Shelswell as its Head of Asia Pacific, replacing Chris Heine, who is to retire from the business later this year. Shelswell joined ICG in 2010 and is currently responsible for overseeing the firm’s investments in Australia and New Zealand. Link


From the horse’s mouth...

“The price of the politics is going to severely damage the prospects of a generation. It’s going to hit employment prospects. It’s going to hit economic performance…It’s going to be difficult.” – William Jackson, Managing Partner at Bridgepoint on Brexit

Private equity doesn’t fit the model we have chosen for the fund. The greatest challenge is openness, information we can share with the public.” – Norway’s Finance Minister, Siv Jensen  explaining the country’s $1tn sovereign wealth fund would not invest in private equity

Hope is not optimism, which expects things to turn out well, but something rooted in the conviction that there is good worth working for.” – Seamus Heaney, poet and Irish Nobel Laureate, born on this day in 1939