Maitland/AMO Private Equity Monitor – 2 November 2018

2nd November 2018

Worth a read

TPG faces difficulties in Europe, but looks to start-ups

Private equity firm TPG’s future in Europe is being questioned after the failed ownership of Poundworld, labelled as “pure mismanagement” by the company’s founder Chris Edwards. The Financial Times argues that there is a mistrust of the firm in many European countries, but that the firm is now looking to focus on fewer sectors in order to provide solid returns for its investors worldwide.

Abraaj's Turkish executives look to start over

The Financial Times this week writes on the fortunes of the executives at the Turkish branch of Abraaj Group, who are looking for a clean break in the form of a buyout by Canadian asset manager Brookfield. It is suggested that Abraaj’s downfall could cause difficulties for private equity investors in the region moving forwards, as well as in other emerging markets.

The nightmares facing private equity

In tribute to the Halloween season, Private Equity News has published a list of the key issues facing the private equity industry, despite the face it is currently riding the crest of a wave. The list includes: the risk of increased regulation from the US; high valuations driven by increased competition and tensions caused by the actions of Donald Trump.

French politicians attempt to lure UK private equity

French politicians last week voted to cut the rate of tax paid on private equity profits in order to tempt UK private equity firms to relocate to France, writes Private Equity News. The proposal still needs approval from the French parliament’s upper house, but could result in foreign investment firms paying nearly 50% less tax.

Private equity firms hire earlier than ever

Following news that Thoma Bravo offered jobs to young, hungry investment bankers almost 2 years before their prospective start date, private equity’s hiring processes in America have come under scrutiny. Bloomberg opines that early recruitment can only be a good thing and firm should even consider recruiting directly from university – on condition that the lucky graduate finds and completes a job as an analyst at an investment bank. The early bird really does capture the private equity worm.

Wall of money

Thomas H. Lee Partners raises $3.6bn for its eight fund

Boston headquartered private equity firm Thomas H. Lee Partners has raised a cool $3.59bn for its eight fund. Private Equity News notes that this fund has overtaken its initial target of $3bn.

H.I.G. closes $3bn fund

The Miami-based H.I.G. has announced the close of its first midmarket buyout fund, named H.I.G. Advantage Buyout Fund, which had set a target of $2.75bn earlier this year. The firm said it has already made three investments from the fund, according to Private Equity News.

CVC looks to raise up to $1.5bn for latest growth fund

Private equity behemoth CVC Capital Partners is looking to rise an eyewatering $1.5bn for its second technology growth fund, according to Private Equity News. The fund would be the largest the firm has ever raised for its growth strategy.

ArchiMed passes halfway mark for its new midmarket fund

ArchiMed SAS has said it has raised over half of the €800m target for its new midmarket healthcare fund. It last raised a fund in 2017, closing on €315m, writes Private Equity News. 

Triton looks to raise €500m for latest debt fund

And it’s Triton to the rescue: according to Private Equity News, the European private equity firm Triton Partners is looking to raise roughly €500m for its latest debt fund. According to sources close to Triton, the fund will be nearly the same size as its debut fund.

Patrimonium Private Equity launches new fund

Patrimonium Private Equity has announced that it is due to launch a new mid-market fund following the sale of CCS Group. The fund will invest in business focusing on consolidation, internationalisation and digital transformation, according to Real Deals.

Canadian investment veterans launch new fund

A trio of Canadian investment managers are due to launch a new $400m-$600m private equity fund according to Financial Post. Peloton Capital Management is due to target mid-market investments with a longer-term holding strategy than traditional private equity funds.

Deal chart

Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
Little FreddieVMG Partners & Hillhouse Capital-Undisclosed01/11/2018UKFood & Drink
PMC TreasuryInflexion Private Equity-Undisclosed31/10/2018UKFinancial Services
Let's Go FitnessNaxicap PartnersAfinumUndisclosed31/10/2018SwitzerlandFitness
RiriChequers CapitalGilde Buy Out PartnersUndisclosed31/10/2018SwitzerlandManufacturing
NeronobileEOS Investment Management-Undisclosed, 67% stake30/10/2018ItalyFood & Drink
OmadaCVC Growth Partners & GRO Capital-Undisclosed30/10/2018DenmarkSoftware
WagamamaThe Restaurant Group Ltd.Duke Street & Hutton CollinsUndisclosed, 3.4x return for Duke Street30/10/2018UKFood & Drink
HB EducationMidlothian Capital PartnersCox & Kings£467m29/10/2018UKEducation
Teracom DenmarkAgilitas Private EquityTeracom ABUndisclosed29/10/2018DenmarkTelecoms
FAR ChemicalCPS Performance Materials Corp.Edgewater Capital PartnersUndisclosed29/10/2018USIndustrials
Holley Performance ProductsSentinel Capital PartnersLincolnshire Management Inc.Undisclosed, 3x return29/10/2018USAutomotive

Movers and Shakers

UK & Europe

Bal Johal and Ian Wallis have been named as the new Co-Chief Executives at MML, taking over from Rory Brooks, who will become Chairman.

Omers Private Equity has appointed Jonathan Mussellwhite as a Senior Managing Director and its Head of Europe. Mussellwhite was previously the Co-head for Europe.

Clearwater International has promoted Michael Loudon to Partner in its north-west of England practice.

From the horse’s mouth...

“Customers were used to going in and finding things priced at £1…Suddenly it was not a pound shop any more.” – Chris Edwards, Founder of Poundworld on TPG’s decision to raise prices in its stores

“Enduring means accepting. Accepting things as they are and not as you wish them to be.” – 17-time Grand Slam tennis champion Rafael Nadal after his withdrawal from the Paris Masters

“Now we must pull together to build the bright, prosperous future that is within Britain’s if we choose to seize it: embracing change, not hiding from it, building on the inherent strength of the British economy and the indomitable spirit of the British people.”  Chancellor of the Exchequer, Philip Hammond’s conclusion of the Autumn Statement.