Maitland Private Equity Monitor – 9 February 2018

9th February 2018

Worth a read


Embrace technology or face ‘treadmill to oblivion’, says report

Hedge funds and private equity firms are on a “treadmill to oblivion” unless they embrace technologies including blockchain and AI, said a report by KPMG and Create-Research. Prominent members of the private equity community, including Tim Hames of the British Private Equity and Venture Capital Association and Jon Moulton, Founder of Better Capital, are quoted as disagreeing entirely with the research. Financial Times, 5 February 2018

Eurazeo merges with rival Idinvest Partners

French private equity firm Eurazeo has merged with rival Idinvest Partners to create a group with €15bn in assets amid an environment of “great momentum” in its home market. The companies said on Monday that Idi, a listed investment company, will sell its entire investment in Idinvest to Eurazeo for €230m. Financial Times, 5 February 2018

BlackRock's private equity advantage

BlackRock this week announced a surprise move into the direct private equity space with the raising of a $10bn fund, as it seeks to take advantage of the myriads of dry powder in the market. Bloomberg Gadfly opines that BlackRock’s departure from traditional low-cost, passive investing into long-term private equity signals a potentially unique offering with dramatically fewer internal conflicts. The article also discusses the need for retaining capable dealmakers who are willing to accept delayed compensation. Bloomberg Gadfly, 8 February 2018

Gates Foundation probes $1bn Abraaj health fund

Investors including Bill Gates’ philanthropic foundation and the World Bank’s IFC have hired forensic accountants to investigate what happened to money they invested in a $1bn Abraaj Group healthcare fund. They have asked Ankura Consulting Group to audit the fund and find out why some of their money has not yet been used for the stated purpose of building hospitals and clinics. Private Equity News, 5 February 2018

Warburg Pincus: fighting the mega-fund trend

The announcement last year of Warburg Pincus’ target of $13.5bn (the same size as the predecessor fund) seemed conservative to many when compared to the age of the mega-funds raised by many rivals. However, Private Equity International argued this week that the firm is being intelligent in avoiding over-concentration in its flagship fund, spreading capital to other funds dedicated to areas such as infrastructure, energy and China. Private Equity International, 7 February 2018


Wall of money


BlackRock seeks $10bn for direct investments

In the first ever attempt by the world’s largest asset manager to make direct investments, BlackRock is looking to raise over $10bn to buy and hold stakes in companies, mimicking Warren Buffett’s approach at Berkshire Hathaway. The move would set up a rivalry with the giant asset manager’s former parent, Blackstone, as well as with private equity giants such as Apollo and Carlyle. Private Equity News, 8 February 2018

KKR gathers $8.5bn for long-term investments

The firm closed on $8.5bn for its Core Investment strategy, which includes $3bn from the firm’s own balance sheet. Core Investment transactions will have an expected hold period of 15 years or more and the vehicle has no recycling provisions. Private Equity International, 8 February 2018

TowerBrook Capital targets $5bn across two strategies

The firm, spun out from George Soros’ investment outfit, is seeking $5bn from investors for its flagship buyout fund and another vehicle that will be minority stakes in companies. The former is targeting $4bn and the latter $1bn. The largest pool of capital previously raised by the former Jimmy Choo owner is the $3.5bn it gathered for its fourth buyout fund in February 2013. Private Equity News, 5 February 2018

Nordic restructuring is shaping up to be big

Nordic Capital’s proposed restructuring of its £4.3bn 2008-vintage fund reportedly could be one of the largest GP-led transactions ever. LPs were told they have 20 days to vote on whether the deal should proceed, and if so, whether they will sell their stakes or roll over into a new five-year continuation fund. Private Equity International, 6 February 2018

CITIC PE nears first close on $2bn China fund

The Chinese private equity firm is holding a first close in March on c.$1.4bn, close to 70% of its target. Fund III is roughly 50% larger than its 2015 predecessor, which closed on $1.3bn. A final close is expected around summer. Private Equity International, 8 February 2018

Olivier Sarkozy raises about $400m for fund

The former French President’s half-brother has raised c. $400m so far for his new private equity fund. His firm, Further Global Capital Management, is targeting $1.25bn for the maiden fund. Further Global will target deals in which it can deploy $75m to $200m and is comfortable with both control buyouts and minority investments. Bloomberg, 2 February 2018

Ex-Robeco chief plots June close for debut impact fund

Future Planet Capital, a London-based venture capital firm, is targeting a first close on $250m for its debut impact fund in June. The firm is aiming to hold a final close on $500m in June 2019, have secured a $20m cornerstone commitment from Royal Berkshire Pension Fund and $30m from TW & Partners – the latter is set to reach $200m at final close. The fund will target university start ups via direct deals and co-investments with top-tier university funds in Europe, Asia and the US. Private Equity International, 7 February 2018


Deal chart


Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
Wyndham Worldwide European PortfolioPlatinum EquityWyndham Worldwide$1bn08/02/2018UKTourism
CEB TalentExponent Private EquityGartner$400m, 10.5x EBITDA08/02/2018UKBusiness Support Services
Step Change EngineeringSimmons Private Equity-Undisclosed08/02/2018UKEngineering
E-LeatherETF Partners-£70m08/02/2018UKIndustrials
GLL Real EstateMacquarie Infrastructure & Real Assets-Undisclosed, €7bn AUM07/02/2018GermanyReal Estate
SFAMArdian-€1.7bn07/02/2018FranceInsurance
Ping An Healthcare TechnologySoftbank Vision Fund-$1.15bn, A round financing07/02/2018ChinaInsurance
Ping An Good DoctorSoftbank Vision Fund-$400m, pre-IPO financing07/02/2018ChinaHealthcare
CBR Fashion GroupAlteri InvestorsEQTUndisclosed07/02/2018GermanyManufacturing
Idinvest Partners’ fundsEurazeoIdinvest Partners€375m06/02/2018FrancePrivate Equity
Idinvest PartnersEurazeoIdinvest Partners€230m, 70% stake06/02/2018FrancePrivate Equity
Vita GroupSVPGlobalTPG CapitalUndisclosed06/02/2018UKSupply
BugabooBain Capital-Turnover c. €160m05/02/2018NetherlandsConsumer

Movers and Shakers


UK & Europe

CEPRES has appointed Marc Dellmann, former Global Head of Private Equity at UBS Asset Management, as Global Head of Business Development. Link

Altamar Capital Partners has appointed José Caturla as Managing Director and Head of Insurance and Pension solutions. Between 2002 and 2017, Caturla was Corporate Investments Director of Aviva Spain and CEO of Aviva Gestión, the asset manager. Link

Other

Several senior executives have left Abraaj Group or stepped down from senior roles as the Dubai-based firm seeks to raise its largest-ever fund. Link


From the horse’s mouth...

“In a post-Carillion world, it would be far more accurate to view the private equity model as one for British business to aspire to.” – Tim Hames, Director General, British Private Equity & Venture Capital Association

“If they don’t do anything they’re going to be the unwitting victims of the revolution that is going to sweep through their industry.” – Amin Rajan, Chief Executive of Create Research on the need for private equity firms and hedge funds to adopt new technologies and embrace innovation

“All the measures of the Government are directed to the purpose of making the rich richer and the poor poorer.” – William Henry Harrison, 9th President of the United States (born on this day in 1773)