Maitland/AMO Private Equity Monitor – 19 February 2021

19th February 2021

Worth a read


Private equity wake-up call

The Sunday Times profiles Wol Kolade, managing partner of Livingbridge and who writes about the prejudice and racism he has experienced throughout his career and laments the paucity of diversity within the private equity and venture capital industries. He estimates that 1% of investment roles in private equity are held by black people . Kolade has created a movement to secure City work placements called “#100BlackInterns”, which has grown to 10,000 internships.

SPACs will chip away at private equity deal flow

According to Ares Management’s co-founder and CEO Michael Arougheti, special purpose acquisition companies could eat into buying opportunities across private equity and affect dealflow.NOting the importance to appreciate what constitutes a good LBO candidate does not necessarily make a good SPAC candidate, he also made the point that when looking at the amount of capital searching for transactions, SPACS will chip away a little at the aggregate market opportunity for private equity.  The piece also notes a confluence of events which isi pushing the SPAC phenomenon: Strong equity markets, Covid-19 massively decreasing the window for conventional IPOS and that most modern of fears: fear of missing out.

Pandemic prudence is giving way to colossal dealmaking

According to Bloomberg, private equity houses’  year of careful saving due to the pandemic is now bursting at the seams to take a chunky bite out of the dealmaking market in Europe.  The piece notes that buyout firms have announced a whopping $29bn of takeovers involving European companies already this year which is up 60% YoY and the most for this relatively short period on record.  Acknowledging that the private equity industry has long had the luxury of holding a record amount of dry powder, they also had the luxury of time to pick its best.

Let's hope for a recovery...

According to the Financial Times, private equity groups are gearing up a notch in pursuing British companies, capitalising on a UK stock market which has fallen over the past 12 months- in contrast to the S&P 500 index which has since recovered from its own slump when teh pandemic first hit.

What are the challenges private equity needs to look out for this year?

Joining forces with IPEM ahead of the 2021 Private Equity conference in Cannes. James Isola, partner at Maitland/AMO takes us through the results of IPEM’s latest private equity survey and looks at the main challenges for GPs and how effective communications can help overcome them.


Wall of money


CD&R raises $16bn

Clayton, Dubilier & Rice is said to have raised around $16bb for its eleventh flagship vehicle, according to sources familiar with the fundraise, exceeding the $13bn target by the third quarter of last year. The fundraise follows the firm’s most active investment period ever with 13 deals being struck over the past 12 months and 20 add-on acquisitions made by portfolio companies.

Insight to launch eleventh fund

According to sources, technology-focused private equity firm Insight Partners is planning to pitch its latest flagship fund with a target of at least $12bn. The fundraising process could start as early as next month and will mean Insight is coming to market less than a year after it raised $9.5bn for the predecessor fund.

Hamilton Lane closes fifth secondaries fund

Hamilton Lane has raised nearly $4bn for its largest ever fund focused on private equity secondaries. Investor demand for second-hand stakes in private equity assets has been particularly strong recently, with Preqin data showing that $76bn was raised last year.

Creador continues in Asia

Malaysia-based PE firm Creador is said to be planning a launch for its fifth fund next month with a target of $600m, less than two years after it raised $565m for the predecessor vehicle. The firm, which invests predominantly in South and Southeast Asia, will look to start to investing in Thailand with this latest fund, according to a source.

Savant closes first growth fund

Savant Growth—a spinout of European growth investor Kennet Partners—has collected about $500m for its first stand-alone fund to invest in U.S. technology companies. The executives of the firm said that the fund will aim to invest in founder-owned software-as-a-service and technology-enabled businesses.

Advent springs to life (sciences)

Advent Life Sciences has announced that it has closed two new funds with total commitments of $215m. The first of these is its third life sciences venture capital fund and the second a new impact fund raised in collaboration with the Harrington Discovery Institute to target drug discovery and innovation. The funds will invest at seed, Series A and beyond.


Deal chart


Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
SchockTriton PartnersIK Investment PartnersUndisclosed18/02/2021GermanyConsumer goods
Eque2Kempen European Private Equity Fund-£46.5m18/02/2021UKConstruction
Student housing portfolioGreystar Real EstateKKR£291m18/02/2021UKReal Estate
InnovadIK Investment Partners-Undisclosed18/02/2021BelgiumAgriculture
IM Global PartnerIK Investment Partners, LuxempartEurazeoUndisclosed, 20% stake18/02/2021FranceAsset Management
Deloitte's UK restructuring armTeneoDeloitteUndisclosed17/02/2021UKProfessional Services
Nestlé water brandsOne Rock Capital Parnters and Metropoulos & Co.Nestlé$4.3bn17/02/2021North AmericaUtilities
Collingwood LightingAmbientaBaird CapitalUndisclosed17/02/2021UKRetail
NorTex Midstream PartnersTailwater Capital-Undisclosed17/02/2021USOil & Gas
Asda GroupTDR CapitalWalmart£6.8bn16/02/2021UKRetail
PersoneticsWarburg Pincus-led funding round-$75m16/02/2021IsraelData
Industrial Portfolio in WalesInvestcorp-Undisclosed15/02/2021BahrainReal Estate

Movers and Shakers


UK & Europe

Kester Capital has hired three new Associates: David Fernie, Jack Murphy and Conor O’Gorman.

Piper has promoted Dan Stern to partner.

North America 

Jay Clayton, former Chair of the SEC, has been appointed as Apollo Global Management’s new Lead Independent Director.

 

 


From the horse’s mouth...

If our future is inextricably linked to entrepreneurship then do something dramatic.” – Wol Kolade, Managing Partner of Livingbridge

One of the things that is evolving is the concept of what it means to be a responsible investor… it’s not a black and white issue. It is about how a GP assesses the opportunities and risks associated with an investment decision along the dimensions of E,S and G, and how they can move the needle to help achieve sustainable growth.” –  Tania Carnegie, Global Lead, Private Equity and Asset Management, KPMG IMPACT

Private equity is better understood now as either a potential strategic partner or as an exit path.” – Ed Huang, Co-Head of Asia Acquisitions in Private Equity at Blackstone Group