Maitland Private Equity Monitor – 9 March 2018

9th March 2018

Worth a read

Private equity is laggard

The industry titans have seen great success in entering the investing world; their valuations, however, fail to demonstrate this. The contributing factors are reportedly complexity, lack of clear reporting and poor corporate governance. In theory shares in KKR, for example, should be attractive; the rapid growth in AUM is resulting in strong growth in the base management fees that the firms collect whether funds perform well or not. Nevertheless, public markets rate these companies on a lower multiple of earnings than more traditional asset managers and even banks – both of which are arguably riskier and more complicated businesses. Private Equity News, 6 March 2018

Embattled Abraaj frees private equity investors from capital commitments

The firm this week revealed that it has begun freeing large investors from millions of dollars in capital commitments after the decision to suspend its new fund. The move apparently highlights the impact on Abraaj’s business from a dispute with four other investors over the use of their money in a separate $1bn healthcare fund. Reuters, 7 March 2018

Private equity groups under pressure to take ‘riskier’ bets

Buyout bosses are reportedly taking on more risks due to a combination of factors, notably the benign economic backdrop, investors being keen to deploy their cash and favourable US tax conditions. The buyout market is as a result seen as ‘red hot’ as private equity firms chase large public companies at their fastest pace, with firms paying record prices for assets and taking on debt levels close to the peaks of a decade ago. Financial Times, 4 March 2018

Private equity diversity doesn't shine through at SuperReturn

Despite the promotion of diversity and inclusion being one of the top themes at the World Economic Forum’s annual meeting in Davos this year, only 13% were women of over 400 speakers at SuperReturn were women. Women make up 9.4% of senior positions in the industry, significantly lower than in other alternative asset classes such as venture capital and real estate, where women comprise 21% of employees. David Rubenstein, Carlyle Group LP co-founder, said the private equity industry needs to do a better job in promoting diversity. Bloomberg, 5 March 2018

Wall of money

Hg hits first close of Saturn fund, launches transition capital strategy

Hg has launched two new funds that will target large-cap buyouts and transition capital for founders who are not yet ready to give up control of their businesses. Hg Saturn, the large-cap fund, recently held a first close of £1.1bn, above the initial target of £1bn, according to Real Deals. The fund is understood to have a hard-cap of £1.5bn and will target companies with an enterprise value of more than £1bn. Real Deals, 6 March 2018

Nordic Capital executes biggest ever GP-led restructuring

Nordic Capital has executed the largest GP-led restructuring of all time; Coller Capital and Goldman Sachs Asset Management will acquire around 60% of LPs’ stakes in the Scandinavian buyout firm’s 2008-vintage fund. 60% of Nordic Capital VII equates to c. €1.5bn of net asset value. Coller and Goldman will split the secondaries capital 70/30 respectively. Private Equity International, 8 March 2018

Unison Capital to raise new Japan and Korea funds

Tokyo-based Unison Capital is set to begin fundraising for its second Korea fund and fifth Japan fund in the second half of the year and 2019 respectively. The combined target for both funds is believed to come in just under $1bn. Private Equity International, 7 March 2018

Altamar raises €541m for latest secondaries fund

Madrid-based Altamar Capital Partners has closed its latest secondaries fund on €541m, above the original €500m target. The fund is the largest it has raised to buy second-hand stakes in private equity funds and will target Europe, the US and some emerging markets. Private Equity News, 7 March 2018

Aston Martin's backer Investindustrial raising €375m for new strategy

Mid-market buyout firm Investindustrial is seeking to raise €375m for its debut lower mid-market fund. It will deploy between €10m and €50m of equity into each deal and is led by Robert Ardagna. Private Equity News, 8 March 2018

Amundi to launch fourth direct small-cap fund

Amundi Private Equity is planning to launch its fourth direct small-cap fund in the second half of this year with a €150m target. The fund will invest between £3m to £10m in small enterprises and follows a 2012 vintage which secured €120m in commitments. Private Equity International, 6 March 2018

Deal chart

Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
Jiayou ChemicalItalmatch, Ardian-backedEcolabUndisclosed08/03/2018ChinaManufacturing
Kimble ApplicationsAccel-KKR-Undisclosed08/03/2018UKSoftware
RawlinsonsCogital Group, Hg-backed-Undisclosed08/03/2018UKServices
AccorHotels-Eurazeo€552m, 4.2% stake07/03/2018FranceTravel & Leisure
CM DowntonEmergeVest-£75m07/03/2018UKLogistics
Instalco-FSNc. £22m07/03/2018SwedenUtilities
MediGroupMid Europa PartnersBlue Sea CapitalUndisclosed06/03/2018SerbiaHealthcare
FH GruppenAltor-Undisclosed06/03/2018NorwayConstruction
Jigsaw24Alcuin Capital PartnersNorthEdge CapitalUndisclosed, 3.1x return05/03/2018UKTechnology

Movers and Shakers

UK & Europe

Idinvest Partners has appointed Guillaume Cavalin as Legal Director. Prior to joining, he worked at Jones Day’s Paris office as a Senior Associate and at the Tokyo office of White & Case as an Associate. Link

Abraaj’s energy team, who joined the firm in 2016, has left and formed a new partnership with US firm Denham Capital. Link

Keensight Capital has appointed Adrien Van Eynde as its Chief Financial Officer. Van Eynde joins from Ardian. Link

ICG has appointed Andrew Sykes as a Non-Executive Director. Sykes was formerly chair of fellow asset manager SVG Capital. He is currently Chair of accountancy firm Smith & Williamson and a Non-Executive Director of Gulf International Bank. Link

Partners Group has named Steffen Meister as Chair of its Board of Directors. Meister was CEO of the firm from 2005-2013. Link

Macquarie Capital has announced the appointment of Intel Capital Investment Director Erik Jorgensen as Managing Partner in its European principal investment business. Link

After 14 years at the firm, Livingbridge Partner Paul Morris has joined BDO as Head of Growth Advisory. Link

Richard O’Donnell has joined Clearwater International as a Partner. He joins from Canaccord Genuity, where he was European Head of Leisure and Consumer M&A. Link

Hedge fund Toscafund Asset Management has hired Patrick Carey from Jacobs Asset Management as a Principal to work on its nascent private-equity strategy. He was previously Head of Private Investments at Jacobs. Link

Guy Semmens has stepped down as Partner at European mid-market sponsor Argos Soditic after 22 years. Link

Duke Street has announced two appointments, with Tom Salmon joining as Partner and Hugo Strachan as Investment Manager. Salmon spent 13 years at 3i as Partner, whilst Strachan joins from RJD Partners. Link

From the horse’s mouth...

“When everyone is saying everything is great, you look for the flaw.” – Graham Elton, Head of Bain & Co’s private equity practice in Europe

“I think it’s important to have diversity of thought and perspective to make better investment decisions. It’s good for business and the right thing to do.” – Paige Ross, Senior Managing Director HR at Blackstone

“I resolved to abandon trade and to fix my aim on something more praiseworthy and stable; whence it was that I made preparation for going to see part of the world and its wonders.” – Amerigo Vespucci, Italian explorer responsible for the discovery of South America and born on this day in 1454