Maitland/AMO Private Equity Monitor – 13 December 2021

10th December 2021

This monitor for scheduled to be sent on Friday 10th December, but due to some IT issues was unable to be distributed. We apologise for the delay!

Worth a read

Not so fast Granny

Helen Thomas, Business Columnist at the Financial Times writes an opinion piece in which she pours cold water on the UK government’s latest reform to funnel more pensioners’ cash into illiquid assets like private equity. While the government might be keen for pensioners’ savings to pick private equity investments, Thomas argues that it is doubtful whether the returns would justify the additional leverage involved and whether the flood of money into private markets is likely to moderate returns even further.

Fancy a piece of the private equity pie?

The Times looks at the sort of companies private equity funds have been targeting across the globe in search of great returns – and adds that ordinary investors can get in on the action too. The piece notes that the private equity funds have performed impressively in the past decade and looks looks to see how retail investors can have a piece of the pie. The piece notes that private equity is a long-term investment and can be volatile so cautions that if an investor has less than a decde, it could be too risky as an investment tool.

Isn't it rich

Patrick Hosking, Financial Editor of The Times writes a comment piece on the rationale for private equity firms looking to philosophically contort and metamorphose into a publicly listed company. Hosking trots off the rather cumbersome obligations that floating entails as opposed to the luxurious freedom of choice private companies have. His conclusion is that the only rationale for a private equity company to float is to realise value – for in his views, making the partners rich, or rather richer, and that a float crystallises the value of their ownership and makes it easier to turn it into cash. Hosking pooh-poohs claims by some PE firms that have floated as a means of raising capital and concludes that the temptation for some to realise profit while valuations are “this juicy” must be difficult to resist.

Oh come - everyone who wants can have a piece!

And with all this talk of the democratisation of private equity, across the pond, Private Equity News jots down a potted history of the overtures Partners Group has made to Joe public to and making private equity accessible. Starting off with Partners Group in 2009 and a $50,000 minimum investment and then going to 2015 with its Collective Investment Trust. Now, Partners Group envisiosns a future enabled by blockchain technology which could allow investors access to private equity for as little as a cup of coffee. Or even less – at just $1.

Wall of money

Advent raises $4bn for second global technology fund

Advent has raised $4bn for its second global technology fund, exceeding its target of $3bn by 33% and reaches its hard cap of $4bn only after six months in the market. Previous fund Advent Tech has invested in 20 software, data, and cybersecurity companies since its launch in 2019, and Advent Tech II will follow the same strategy, focusing on high-growth acceleration and complex transformation opportunities.

VCs support USD 475m first close of Monzo's latest round

Led by new investor the Abu Dhabi Growth Fund, VCs have raised $475m in the first close for digital bank Monzo’s latest funding round. The company is now valued at $4.5bn, and expects to raise more than $500m in total. Other new investors include Coatue and Alpha Wave Ventures, and existing participating investors include Accel, General Catalyst, Goodwater, Passion Capital, Octahedron and Thrive Capital.

L Catterton seeks nearly $7.8bn for new funds

Consumer-focused L Catterton looks to raise $6.5bn for its latest buyout fund, and expects to begin the formal process imminently. It is also aiming to raise $1.25bn for a new growth investment fund. If successful in reaching its goal, the buyout fund will become 30% larger than its predecessor, which raised $5bn last year.

TSG seeks $5bn private equity fund to shop for consumer deals

Similarly, TSG Consumer Partners is pitching its ninth core buyout fund, seeking to raise $5bn. The firm typically invests in companies with annual revenues of $15m to $1.5bn, and may also invest in debt and senior preferred equity. The latest fund is expected to follow the strategy of its predecessor funds, which focuses on expanding consumer brands.

Providence Strategic Growth pitches $2bn second European fund

PSG plans to raise €2bn for its second European fund, aiming to back investments in European software and technology-enabled companies. This is its fourth active fund in 2021, as it wrapped up its first European fund at €1.25bn d in February, and announced a $4.5bn main fund for midmarket and lower midmarket investments and a $1bn continuation fund later in the year.

Deal chart

Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
Groupe Rossi AeroTikehau Ace Capital-Undisclosed10/12/2021FranceAerospace
Adcubum and tech11TA Associates-Undisclosed10/12/2021Switzerland and GermanyHealthcare/Software
Halo Technology GroupAmphenol CorporationInflexion$715m7/12/2021UKTechnology
Tes GlobalOnexProvidenceUndisclosed7/12/2021UKEducation/Technology
SRL Traffic Systems3i InfrastructureLDC and Crescent Capital Group£191m6/12/2021UKInfrastructure
ViabizzunoClessidra Private Equity21 InvestUndisclosed6/12/2021ItalyInfrastructure
BuckarooKeensight CapitalBlackfin CapitalUndisclosed6/12/2021The NetherlandsFintech

Movers and Shakers

UK & Europe

The Riverside Company has promoted Jeffrey Gordon to managing partner and co-fund manager of the Riverside Strategic Capital Fund.

North America

Tony James is set to retire from his role of executive vice-chairman at Blackstone Group in January 2022 after a nearly 20-year career at the firm.

From the horse’s mouth...

Even if high valuation multiples and the current rise in inflation rates are a concern for investors, private equity is expected to continue outperforming public markets thanks to the significant growth and operational improvements in underlying portfolio companies that GPs can bring” – Christian Diller, managing partner at Montana Capital Partners

We either take external capital… or we close to new business and we don’t get any money. Or we take the members’ money and invest it in the non-profit business.”-  Mark Hartigan, Chief Executive of LV explaining why he is looking to sell the mutual to private equity 

Mathematical science shows what is. It is the language of unseen relations between things. But to use and apply that language, we must be able to fully appreciate, to feel, to seize the unseen, the unconscious.” – Ada Lovelace, born on this day in 1815