Maitland/AMO Private Equity Monitor – 28 September 2018

28th September 2018

Worth a read


Pass the parcel deals becoming commonplace, but present serious risks

Private equity firms are increasingly selling companies to one another, a trend which has grown in the last ten or fifteen years. While this makes sense from a private equity perspective, with investors involving themselves at different levels of growth and value, the risk is that the business model undergoes a great deal of change and does not maintain consistency, as with the example of Coral, which was bought or invested in six separate times over a 16-year period.

Cerberus boosts its tech credentials

No word on the extent to which the mythological multi headed canine guardian of the Greek underworld influenced its name, but private equity giant Cerberus Capital Management is pouncing into technology. The alternative asset manager is creating a new subsidiary to enable companies it owns make use of the latest technologies in a range of areas.

Private equity provides non-bank lending amid easier regulatory environment

Regulation since the financial crisis has not been as stringent as that which followed the Great Depression and has led to a situation where three of the four largest private equity firms in the US have larger credit divisions than private equity. The big bailouts of the last century have been aimed at banks, not at other financial institutions providing credit, but the risk is still not entirely removed, as the 2008 crisis showed.

Carlyle predicts a record year for Italian private equity deals

US firm Carlyle Group has said that it intends to double down on Italy as family-owned businesses become more likely to sell amid high valuations, which should lead to a record year for M&A in the country. These types of businesses make up an astonishing 85% of those in Italy and have moved away from the traditional trend of listing on the stock market in favour or private investment.


Wall of money


Altor targets €2.5bn for latest fund

Swedish firm Altor Equity Partners has said that it is back in the market to raise its latest flagship fund, with a target of €2.5bn. This would be the largest ever raised by the firm and is expected to be heavily oversubscribed, according to sources.

TPG mulling acquiring Abraaj's healthcare fund

American private equity firm TPG is apparently in discussions to take over Abraaj Group’s $1bn healthcare fund with its Rise Fund, according to a letter to employees from AlixPartners.

Softbank team up with TPG to launch a $300m fund

Softbank’s South Korean venture unit has teamed up with TPG, the San Francisco based private equity firm, to launch a $300m venture fund targeting Asia. Softbank commented that the fund would “significantly boost” its involvement in Chinese early stage companies in “the internet, technology and media”.

Inverleith held a €60m final close on debut fund

Scottish private equity firm Inverleith has held a final €60m close on its debut private equity fund. It will invest in high-growth consumer businesses in the UK worth up to €30m.


Deal chart


Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
United Group BCBC PartnersKKRUndisclosed27/09/2018NetherlandsTelecoms
Urgent CargusMid Europa PartnersAbris Capital PartnersUndisclosed27/09/2018RomaniaLogistics
HeTian Hospital ManagementKKR-Undisclosed26/09/2018ChinaHealthcare
EncludePalladiumTriodos BankUndisclosed26/09/2018NetherlandsFinancial Services
VersaceMichael KorsBlackstone$2.1bn25/09/2018ItalyFashion
Two combined-cycle gas turbine plantsStarwood Energy Group GlobalDominion Energy Inc.c. $1.23bn25/09/2018USEnergy
Liqid InvestmentsToscafund Asset Management-€33m investment round25/09/2018GermanyFinancial Services
ScanaconAlderVerdane CapitalUndisclosed, 3x return25/09/2018SwedenEnergy
MeteoGroup Ltd.TBG AGGeneral AtlanticUndisclosed25/09/2018UKNews Services
H&MV EngineeringNovus Technical ServicesMML CapitalUndisclosed25/09/2018IrelandEngineering
Wallenborn TransportsEquistone-Undisclosed24/09/2018LuxembourgTransport

Movers and Shakers


UK & Europe

NorthEdge Capital has announced a raft of promotions, led by that of Ray Stanton to Joint Managing Partner. Kevin Parker has also been promoted to Partner and Head of Portfolio, while Tim Rowley will take over the role of Head of Yorkshire and the North East from John Rastrick, who leaves the firm to take a career break.

Charterhouse Capital Partners has boosted its investment team with two new hires: Teresa Bergel and Sebastian Kahm, who joined as investment managers earlier in September. Bergel joined from Spanish priavte equity firm Altamar Private Equity, while Kahm joined from DH Private Equity Partners. 

Former Ciclad dealmaker Antoine Rouland has been hired by Agilitas Private Equity as an Investment Director. Anne-Claire de Pompignan has also been appointed as the firm’s new Head of IR, having joined from Lyceum Capital in August.

America

Yu Ben Meng has been appointed CIO for CalPERS, California’s $360bn pension fund. Meng joined from State Administration of Foreign Exchange (Safe) where he was deputy CIO.

Other

Investcorp has appointed British MP Sir Michael Fallon to its international advisory board.


From the horse’s mouth...

The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.” – Rupert Murdoch, chairman of 21st Century Fox, which has agreed to sell its 39% shareholding in Sky to Comcast 

It does not matter how slowly you go so long as you do not stop” – Confucius, Chinese philosopher, born on this day in 551 BC

“Buyout groups like secondaries because… it feels like there is not much work to do.” – Per Stromberg, Professor of Finance and Private Equity at the Swedish House of Finance