Maitland/AMO Private Equity Monitor – 19 November 2021
Worth a read
A leader in the Economist writes that the current push for policymakers worldwide to restrict the types of properties large investors want to buy, should be welcomed. It notes that large investors have large appetites and ambitions with build to rent flats becoming a lucrative line of business for Wall Street firms such as KKR and Goldman Sachs. Noting that demand for rental housing has never been higher, with falling ownership rates across the developed world means that decent quality housing in the private rented market is more sought after than ever. The outlet welcomes the flood of institutional money coming, at a “crucial time”. Noting that the pandemic might foster innovative imagination, with an overhaul of planning rules, it also necessitates extra funding to pay for the building work.
Private Equity News reports that buyout firms worldwide have raised more than $714bn in dry powder so far this year according to Preqin and the mountain of unspent capital is due to reach new heights as the race is on for next year. The piece notes that the surge in fundraising is being fuelled by continued investor appetite for private equity exposure which can offer strong, uncorrelated long-term returns even amid a persistently low interest rates environment. And that’s a challenge for LPs as they scramble to find the resources – and energy – to keep up.
General Electric’s decision to split into a tripartite shadow of its former self has set the stage for what the Financial Times terms as a “feeding frenzy” among private equity buyers who are looking to carve up the industrial conglomerate into smaller pieces. The piece notes that a flurry of private equity deals to complete the unwinding of GE would effectively herald the end of one era in financial management and the rise of another. One private equity partner who called GE’s break-up the “death knell” of the conglomerate business strategy.
Investment Week looks at data that shows that over 67% of private equity firms have cited market conditions over the last year as a key barrier to deploying capital, according to a new market report from Gallagher. The report surveyed 150 private equity firms across the UK, US and Asia. Limited capital capability was felt most acutely in the UK with 72% of firms revealing conditions prevented capital deployment compared to 62% in Singapore which possibly reflected the harsher effects of the pandemic across Europe.
Wall of money
A Los-Angeles based private equity firm, Oaktree Capital Management, has made a final close of its 11th distressed debt fund at $15.9bn, exceeding its original target of $15bn. The fund is the largest in Oaktree’s 25 year history.
Adelis has closed its third fund on top at €932m. The fund was significantly oversubscribed and raised €855m from external investors, on top of which, Adelis’ employees have committed to invest €77m, which pushed the total fund size to €932m.
|Acquisition Target||Buyer||Seller||Value||Date Announced||Region||Sector|
|CESIF, ISEP and CEEP||Magnum Capital||-||Undisclosed||19/11/2021||Spain||Education|
|INTERNI||Lifestyle Design||Progressio||Undisclosed||19/11/2921||Italy||Lifestyle and consumer|
|G+E GETEC||JP Morgan||EQT||Undisclosed||19/11/2021||EU||Energy|
|ekaterra||CVC||Unilever||€4.5bn||18/11/2021||EU||Retail and Consumer|
|3i||Mepal||-||Undisclosed||18/11/2021||The Netherlands||Retail and consumer|
|Iconic Images||Authentic Brands Group||VGC Partners||£20m||18/11/2021||UK||Cultural archive|
|AutoForm Engineering||Carlyle||Astorg||$2bn||17/11/2021||Switzerland||Industrial software|
|Cawood||Ensign-Bickford Industries||Waterland||3.7x MM, 79.9% IRR||16/11/2021||UK||Industry services|
|Opus Talent Solutions||Graphite Capital||-||Undisclosed||16/11/2021||UK||Recruitment|
|Park Holidays||Sun Communities||ICG||£900m||15/11/2021||UK||Retail and consumer|
|Scaled Agile||Eurazeo||-||$300m||15/11/2021||US||Business services|
|MINT||Tikehau Capital||-||Undisclosed||15/11/2021||Italy||Marketing and advertisement|
Movers and Shakers
UK & Europe
Evolution Capital Partners has appointed Kim Lapcewich as a partner. She was previously senior director of human resources for Moen and held positions at KeyBank and United Airlines.
Connection Capital has appointed Lucy Merson as investment manager and Laura Scott as investment executive. Merson joins from BDO, where she focused on advising high growth businesses seeking funding, and Scott was previously at Grant Thorton’s corporate finance team, providing transaction advisory services to SMEs.
From the horse’s mouth...
“It’s tempting to eat them all at once… but it wouldn’t be the right thing to do” – Philipp Freise, KKR’s European private equity co-head, likening private equity’s use of debt to children’s approach to a box of chocolates
“The fundraising market for next year looks astoundingly busy” – Gabrielle Joseph, head of due diligence and client development at Rede Partners
“The only guilty pleasure I have is pasta” – Alison Janney, actress, born on this day in 1959