Maitland/AMO Private Equity Monitor – 20 March 2020

20th March 2020

Dear Readers,

We hope you are all well and staying safe in these uncertain times.

We will be continuing to update you on the most important news from the private equity industry on a weekly basis and, despite the continuing market volatility following the coronavirus outbreak, it is heartening to see that there are still deals being done and money being raised from investors. Much of our worth a read section is, naturally, dedicated to the evolving pandemic, but we are keen to cut through this and bring you the continued “business-as-usual” activity from the industry.

However, if you are keen to receive a more focused update on Covid-19 and how it is affecting private equity, private debt and other alternative asset classes, Maitland/AMO is producing a daily summary of key media coverage, our “Covid-19 Alternatives Briefing”. If you’d like to receive this daily update then please email fdonaldson@maitland.co.uk.

We hope you are able to enjoy your weekends, continue to stay safe and work to the best of your ability through the coronavirus-related measures.

Best wishes,

Finlay & Andrew

Worth a read


Fret not: we'll ride this out

Following Bill Ackman’s acquisition of more Blackstone shares yesterday, the Financial Times’ Lex colum opines that, despite Ackman’s view that private equity businesses could go bankrupt, firms like Blackstone are likely to ride the coronavirus wave as they did with the global financial crisis. The piece notes that, unlike in 2007, private equity firms have more leverage on their balance sheets but, given the low valuations of companies, there will be deals to be done and perhaps on an all-equity basis.

Corona clauses on the up

The Financial Times reports that loan documentation has seen so-called “corona clauses” crop up, granting borrowers more room to absorb effects to their business from the outbreak. However, some worry that these new clauses could leave investors “holding the bag” at the end of the current downturn.

Time for a deal of a lifetime?

Remember those slightly excruciating Muller yoghurt pleasure v pain adverts? Well it’s a bit like that in the private capital world, only this time, pleasure doesn’t take everything home. According to the Financial Times, there is a strangely contradictory sentiment in the private capital world, namely, fear mingled with optimism. With talk of endless supplies of dry powder some dealmakers believe that they are finally on the cusp of “the deals of a lifetime.”

Watch that denominator effect

The Wall Street Journal writes that private equity LPs are hoping that the “denominator effect” of current public market volatility does not impact their investment portfolios and force them to miss out on a “buy-low opportunity” in private markets. This effect could mean investors have to slow or halt new private-market investments to rebalance portfolios. The silver lining is that, according to a survey by placement agent Eaton Partners, 52% of institutional investors see private equity as the most attractive asset class in the turmoil of the coronavirus.

Let's go to the movies and grab a bite to eat? No really...

Among the other sectors that are being touted as targets for private equity firms are cinemas and restaurant chains, according to the Financial Times and Wall Street Journal respectively. The latter writes that private equity retains plenty of cash to take advantage of opportunities that will arise in the restaurant sector, as consumer behaviour is likely to return to normal after the outbreak.

Which way is the wind blowing?

The Wall Street Journal writes that, despite private equity deals falling down in the face of Covid-19, private debt players could be well-placed to move forward with certain deals where traditional lenders are retrenching. However, there is also a risk that some firms are overexposed to vulnerable companies that could default in the coming days, weeks or months, meaning sentiment among private credit managers is mixed.

Cyber diligence stepped up

The recent surge in high profile data breaches has meant that private equity firms are taking another, more thorough look on cybersecurity diligence before backing a particular investment. According to Private Equity News, firms are focusing more on the risks associated with the companies they back adn potential loss of value when those risks are not properly addressed.


Wall of money


Sequoia looks for $7bn

In one of the first fundraising announcements since the outbreak, Sequoia Capital is said to be targeting $7bn for its latest set of venture funds, which will look at tech start-ups in the US, China and India. The Financial Times suggests that fundraising could close as soon as July.

Macquarie closes infra debt fund

Macquarie Infrastructure Debt Investment Solutions (Midis) has closed its latest infra debt fund on $645m. The vehicle is part of an investment grade strategy that has raised $5.9bn since 2016.

Commonfund Capital targets $300m

The emerging-markets focused firm is said to be targeting $300m for its third fund-of-funds, 50% larger than the second vintage raised in 2017. In a March 9 filing with the SEC, the fund had no commitments.


Deal chart


Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
Learning Curve Group-MML Capital PartnersUndisclosed, 3x return20/03/2020UKEducation
ViridorKKRPennon Group£4.2bn19/03/2020UKRecycling
GroupBCBentley SystemsYFM Equity PartnersUndisclosed, > 3x return19/03/2020UKSoftware
Karlson, InteviBaird Capital-Undisclosed18/03/2020UKTMT
Churchill GroupESO Capital-Undisclosed17/03/2020UKBusiness Services
Pathway Vet AllianceTSG Consumer PartnersMorgan Stanley Capital Partners>$2bn16/03/2020USVeterinary
CheckmarxHellman & Friedman-$1.15bn16/03/2020IsraelCybersecurity
Innovative Safety SystemsYFM Equity Partners-Undisclosed16/03/2020UKAutomotive

Movers and Shakers


As you can imagine, our movers and shakers column is a little light this week. However, there is a piece of positive news from Real Deals that we would like to share. Apparently, recruitment activity in private equity portfolio companies is “forging ahead” and remains seemingly impervious to the current global crisis. Although not universally shared, many firms are actively interviewing by using video chat tools.


From the horse’s mouth...

“Mr President, the moment you send everyone home for Spring Break and close the borders, the infection rate will plummet, the stock market will soar and the clouds will lift” – Bill Ackman, American hedge fund manager on Twitter

Cybersecurity is no longer simply an IT challenge, it’s essential to business survival” – Les Brown, partner at HGGC

Be patient and tough; someday this pain will be useful to you” –  Ovid, Roman poet, born on this day in 43 BC