Maitland/AMO Private Equity Monitor – 16 October 2020

16th October 2020

Worth a read


Portfolio ICU

Three finance professors have conducted an analysis on the impact of the coronavirus on private equity-backed companies which found that 10% were in “intensive care”, which could have an impact on performance and reputation. The Financial Times wrote that the academics collected data from 214 private equity managers overseeing combined assets of $1.9bn, who said that around half of their companies were moderately or very affected by the pandemic.

Opportunity knocks

The Wall Street Journal reported yesterday that a panel of private equity executives who spoke at the Milken Institute Global Conference suggested that there are plenty of opportunities amid the coronavirus pandemic, but that a recovery from the economic damage is taking longer than originally anticipated. Scott Kleinman, co-president at Apollo Global Management, said that the firm was keeping a close eye on commercial real estate and had invested almost $5bn in the airline, aerospace and aircraft industries through structured credit and structured equity.

Back of the net

Clubs in the top-tier Italian football league, Serie A, have backed a joint bid by CVC Capital Partners and Advent International to acquire a stake in the league’s broadcasting rights, international trademark and commercial development for around €1.6bn. The Financial Times reported that the private equity firms will now enter four weeks of exclusive negotiations with the Lega Calcio Serie A, the body that runs the division.

Impact gains ground

Buyout firms in Europe are “betting big on impact”, according to Private Equity News, with 17 vehicles currently looking to raise $21bn, the largest sum targeted for the asset class in the past five years based on Preqin data. The publication suggested that the pandemic “seems to be the final push it needed to move it into the mainstream”.

Smith settlement

Robert Smith, the founder of Vista Equity Partners and the US’s richest black American, has agreed to a $140m settlement with the Department of Justice to resolve a long-running criminal tax investigation, according to The Wall Street Journal. A person familiar with the matter is reported to have said that Smith will admit liability for personal taxes owed and failing to properly file foreign bank account reports but avoid indictment.

Big fish, similar-sized pond

Private Equity International data found this week that, despite the impact of the coronavirus pandemic, fundraising levels this year matched that of the first quarters of 2016 and 2018, but was spread among a smaller pool of managers. The number of funds closing in 2020 was 583, down from 1,185 through the whole of 2019, with LPs said to prefer mega-funds and firms with a proven track record over debut or younger buyout firms.


Wall of money


HarbourVest raises over $8bn for new secondary fund

HarbourVest Partners has closed up fundraising for its largest ever flagship secondaries fund, Dover Street X LP, closed at its hard cap with $8.1bn, including the general partner commitment. Public pensions that approved commitments to the new fund included the Nebraska Investment Council, the Vermont State Employees REtirement System and the Policemen’s Annuity & Benefits Fund of Chicago.

Arbor Investments raises $1.5bn in under 100 days

In a feat nearly as impressive as Mr Fogg’s trip around the world in 80 days, food and beverage-focused Arbor Investments needed just 87 days to raise its fifth fund raising $1.5bn. What makes the fundraising notable is that it was the latest to be conducted entirely using web conference technologies.

Insight looks to preferred equity

New York-based Insight Partners is said to be pitching a new preferred-equity investment strategy to take advantage of market dislocations brought on by the coronavirus pandemic. The strategy will aim to raise $875m and purchase convertible preferred equity that also carries a contractual return.

Triton closes second debt fund at €744m

London headquartered Triton Partners, which invests in medium sized businesses in Europe, has amassed €744m at the final close of its latest debt fund, surpassing its first €500m target.

LLCP's second Europe dedicated fund closes

California headquartered Levine Leichtman Capital Partners has held a final close for its second Europe dedicated private equity fund at €463m. The firm’s predecessor fund closed at €100m in 2015. The firm expects to continue building its European origination and investment operations and support industry leading middle market companies.


Deal chart


Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
Indigo CapitalAlantra-Undisclosed16/10/2020FrancePrivate Capital
ArrivalBlackRock-$118m15/10/2020UKAutomotive
GantnerSALTOArdianUndisclosed15/10/2020AustriaSecurity
FundrockApex Group-Undisclosed15/10/2020LuxembourgFund Management
The Livekindly CollectiveEQT, Trustbridge Partners et al-$335m14/10/2020UKFood & Drink
OctotelActis-Undisclosed14/10/2020South AfricaTMT
RSAWEBActis-Undisclosed14/10/2020South AfricaTMT
Benson Elliot Capital ManagementPineBridge Investments-Undisclosed14/10/2020UKFund Management
Sparta GlobalInflexionKey Capital PartnersUndisclosed, 7x return14/10/2020UKTMT
Clearwater AnalyticsPermira, Warburg Pincus et al-Undisclosed13/10/2020USSoftware
MaxContactFPE Capital-Undisclosed13/10/2020UKSoftware
SengenicsSumma Equity-Undisclosed13/10/2020SingaporeHealthcare
KersiaIK Investment PartnersArdianUndisclosed12/10/2020FranceFood Safety

Movers and Shakers


Europe

Alantra has appointed André Pereira-Ambrosio as managing director to lead the firm’s equity capital market activities in the Iberia region. Ambrosio joins from JB Capital .

GCA Altium has named Adrian Reed as the new head of its Manchester office, leading 21 professionals. Reed joined GCA as a graduate in 200 and has been MD since 2012.

Riverside Acceleration Capital has appointed Christian Stein as a partner and Michael Aring as an associate in the company’s German office. Previously, Stein had worked for IBN, EY and BCG.

Sofinnova has appointed Joe Anderson as a partner in the Crossover Fund. Previously he was a partner at Abingworth.


From the horse’s mouth...

More widespread downgrades of underlying portfolio companies could translate into weaker PE fund performance.” – Nathan Flanders, managing director of financial institutions at Fitch 

“Let me be clear, some clients still do not believe in climate change, and we’re working with them, we’re trying to show them why we believe it is.” – Larry Fink, CEO of BlackRock on the challenges of fiduciary duty and climate change

Thought is a strenuous art – few practice it, and then only at rare times.” – David Ben-Gurion, Israel’s first Prime Minister, born on this day in 1886