Maitland/AMO Private Equity Monitor – 1 May 2020
Worth a read
The Financial Times, as part of its “Coronavirus: The world after the pandemic” series, featured an authored piece from the President and COO of Blackstone, Jon Gray, urging governments, regulators and companies not to “handcuff” private capital investment, which can fill the vacuum being created by the pandemic. He suggests that while rescue capital is clearly a big part of this, with well-known companies like Airbnb and Expedia turning to private markets firms, there is also a need for private capital to back fast-growing sectors which can resist the pandemic, such as logistics and healthtech.
While much of China emerges blinking into the sunlight, Private Equity International reports on the impact the pandemic had on China’s private equity market during the first quarter. Unsurprisingly, deal value fell from $12bn to $5bn – according to Bain’s Greater China Private Equity Report – but interestingly there were only 7% fewer deals by number over the same period with over 100 transactions closing. Some attribute that to the fact that many deals were being finalised in January, alongside people not fully appreciating Covid-19’s impact. The article warns though that the pandemic’s impact on fundraising could become more pronounced in the coming months with one in five investors planning to make fewer private equity commitments this year.
Reuters BreakingViews writes on the story that Blackstone is buying a 10% stake in Crown Resorts for $360m. It notes that the odds of Blackstone winning on this deal are anyone’s guess, while there is no telling how Covdi-19 will impact the deal. The piece notes that there is more uncertainty as to when gamblers might feel emboldened to return to casinos in far-flung destinations noting that even with the odds being equal, Blackstone will “eventually face a tough decision on when to hold ‘em and when to fold ‘em”.
The Financial Times features an article about the growth of Apollo Global Management’s $200bn credit arm which has led to it becoming “part of the basic plumbing of the financial system”. The article suggests that firms like Apollo sense it is now a “time to shine” amid the pandemic, as banks retrench from lending and large companies like Airbnb look for rescue financing.
Two Thomson Reuters indices tracking private equity and venture capital valuations have suggested that private equity portfolios may be suffering more than venture capital holdings, reports Private Equity News. The Private Equity Buyout Index had lost 24% so far this year, while the Venture Capital Index had dropped 4.1% in the same period.
City AM writes that European lobbying groups representing the private equity industry are planning to write to the EU this week to request that the rules around state-aid are relaxed so as not to preclude highly indebted but viable companies in the UK from applying for the government’s business loan scheme.
The Times also features reports that buyout firms are set to lobby Brussels for state-aid rule changes this week. It notes the British Private Equity & Venture Capital Association (BVCA) is already working with the Treasury to seek these amendments. The article also states that in a survey of 56 private equity firm undertaken by the BVCA, 61% stated they are planning to inject more money into their portfolio companies.
Wall of money
Aurora Capital Partners has surpassed its original target for its sixth flagship fund and is now targeting $1.8bn, according to sources. The final close of the fund isn’t likely to occur until summer due to the delays experienced by investors concluding due diligence, as a result of coronavirus travel restrictions.
The Swiss financial services firm has merged its three existing alternatives businesses – Syz Capital, Syz Asset Management alternatives and Syz Private Banking global investment solutions – and brought them under one roof. The combined business will have 1bn Swiss francs in AuM and employ 15 people.
Benelux-focused midmarket firm Parcom Capital Management has closed its sixth fund at the hard cap of €775m. The firm said the fund was heavily oversubscribed and reached the final close after just six months.
The venture capital arm of Canadian pension scheme Omers has launched a $750m fund to back early-stage tech companies. According to Omers Ventures, this is its first transatlantic fund and will target investments in new technologies for financial services, workplaces, logistics, healthcare and property.
Munich-based EMH Partners is expected to raise €650m for its second growth fund and has already raised €550m, according to sources. The predecessor fund raised €350m in 2017 and has made five investments so far.
|Acquisition Target||Buyer||Seller||Value||Date Announced||Region||Sector|
|Polyplus||Warburg Pincus (partial secondary buyout)||-||c. €500m||29/04/2020||France||Healthcare|
|Cimpress||Apollo Global Management||-||$300m secured note||29/04/2020||Ireland||Printing|
|Telefonica's radiolink network||Asterion Industrial||Telefonica||Undisclosed||29/04/2020||Spain||Telecoms|
|o9 Solutions Inc.||KKR||-||$100m||28/04/2020||US||Software|
|SunOpta Inc.||Oaktree Capital, Engaged Capital||-||$30m||28/04/2020||Canada||Food & Drink|
Movers and Shakers
Stirling Square Capital has appointed Andreas Theilgaard and Manuel Gari to boost its capabilities in the Nordics and Iberia. Theilgaard joins from the Carlyle Group while Manuel Gari joins from Goldman Sachs.
EQT has proposed Diony Lebot and Nicola Kimm to be board directors. Lebot is deputy CEO of Societe Generale while Kimm is global head of sustainability and environment, health and safety at Signify.
Pride Capital has expanded its team of analysts in Europe threefold: Fabian Kühn, Nick Bootsma and Anthony van Praet have all joined the company in Cologne and Amsterdam.
Ian Charles, a former top executive at Landmark Partners, has co-founded Arctos Sports Partners, a private equity platform dedicated to the professional sports industry and sports franchise owners.
Tikehau Capital has appointed Neil Parekh from National Australia Bank as the new head of Asia, Australia and New Zealand.
From the horse’s mouth...
“We need all hands on deck – including a big push from private capital – to restart job growth and make our economy better able to withstand future shocks.” – Jon Gray, President and COO of Blackstone Group
“Who’ll do the buying for the government and make sure the purchase prices aren’t too high and defaulting issuers are avoided? Or doesn’t anyone care?” – Howard Marks, co-founder of Oaktree Capital in a letter to clients this month
“What passions cannot music raise or quell?” – John Dryden, Poet Laureate and dramatist, died on this day in 1700