Maitland/AMO Private Equity Monitor – 30 November 2018

30th November 2018

Worth a read


Are we in a private equity bubble?

Financial News seems to think so, due to the vast amounts of dry powder in the market – currently at $1.14tn. Industry experts are said to be raising questions over the lack of deals in the market, rising valuations and the fact that secondaries and deal debt are on the up.

L'Occitane draws private equity interest

The Financial Times’ Lex column looks at the recent performance of French skincare company L’Occitane, which is attracting interest from private equity firms including Advent International. The interest stems from the poor performance of the company on the Hong Kong exchange, where shares are trading below the offering price. The challenge, argues the column, lies in the ability of a takeover candidate to “load up L’Occitane with debt”.

UK-based funds seek advice on potential Labour government

Reuters reports that UK hedge and private equity funds are said to be consulting with specialist lawyers on the possibility of a Jeremy Corbyn-led Labour government. Concerns have been raised about how Labour’s taxation, nationalisation and other policies might affect operations. The Labour Party has moved substantially to the left since last in power under Tony Blair and then Gordon Brown.

Ardian suggests that private lending is not threatening European economies

Private Equity News features an interview with Mark Benke, the co-head of Ardian’s private debt division, who suggests that private lending is more diversified than ever, with the majority of clients being private equity sponsors. Benke also said that he does not expect a downturn to come from the leveraged market, as the market is increasingly institutionalised.

Private equity and interest deduction limits

The IRS has released 439 pages of regulation which will allow leveraged companies to calculate how much Republican tax law limits interest deductions. This is particularly critical for private equity deals, according to Eric Sloan, a partner at law firm Gibson, Dunn & Crutcher, due to the significant levels of leverage involved in the financing process. Bloomberg suggests that this will make private equity firms rethink how they finance their deals.


Wall of money


Blackstone is due to raise $20bn for its global real estate fund

According to IPE Real Estate, Blackstone’s global real estate fund is due to close at $20bn before the year is out, exceeding its previously reported target of $18bn.

Triton set to close latest flagship fund at €5bn hard cap

According to Private Equity News, European Private Equity Firm, Triton, is due to close its fifth and largest fund at €5bn. According to sources, the fund initially targeted €4bn.

Bain Capital considers creating a $3.5bn special situations fund

Bain Capital Credit intends to raise a fund worth just over $3bn for special situations investments next year, according to Private Equity News. Fundraising will begin in December and a first close has been mooted for next May.

Permira Debt Managers targets €2.5bn

The firm is planning to raise this amount for its largest ever direct-lending fund, the fourth such vehicle from Permira. Private Equity News points to the increasingly large fundraises in the private debt market, including recent funds from ICG and Ares.


Deal chart


Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
LakesightTKH GroupAmbientaUndisclosed, 10x return29/11/2018GermanyTMT
GACGilde Buy Out PartnersPon HoldingsUndisclosed29/11/2018GermanyAutomotive
Mycom OSIInflexionClearlake Capital Group$128m28/11/2018UKTMT
Advanced Capital SGRCapital Dynamics-Undisclosed27/11/2018SwitzerlandFinancial Services
Compo ExpertGrupa AzotyXIO GroupUndisclosed27/11/2018GermanyAgriculture
SeraCare Life SciencesLGCLinden Capital PartnersUndisclosed27/11/2018USAHealthcare
Pirtek EuropePNC Riverarch CapitalHalifax GroupUndisclosed27/11/2018UKHydraulics
A+R BetriebsgesellschaftSchönes Leben-Undisclosed27/11/2018GermanyHealthcare
Veltec GroupDeutsche Beteiligungs AGTriton Partnersc. €25-50m26/11/2018GermanyEnergy
Imopólis - Sociedade Gestora de Fundos de Investimento ImobiliárioVärde Partners-Undisclosed26/11/2018USAReal Estate
AHT Cooling SystemsDaikin IndustriesBridgepoint€881m26/11/2018AustriaIndustrials

Movers and Shakers


UK & Europe

Neil MacDougall is to step down as Head of Silverfleet Capital and be replaced by its Head of UK investment, Gareth Whiley. 

Christian Hyldahl, the CEO of Danish supplementary pension Arbejdsmarkedets Tillægspension (ATP), has announced his resignation, claiming that “parts of the surroundings that ATP depend on no longer have faith in me”.

North America

KKR has announced the promotion of 18 Managing Directors, effective 1 January 2019. In addition, Cathy Cai has been appointed as an MD at KKR Capstone. 

 


From the horse’s mouth...

I could see in the US the start of populism… it’s now evolved into nativism and these are very dangerous trends once they start. I wanted to do something to stop it as best I could.” – Steve Schwarzman, Chairman and CEO of The Blackstone Group, explaining the rationale behind his Schwarzman Scholars graduate programme based in Beijing. 

“I think it is the risk of this [a Jeremy Corbyn led Government] that is making sponsors pause for thought, rather than a hard or soft Brexit.”Paul Dolman, head of private equity at Travers Smith LLP.

“To improve is to change; to be perfect is to change often.” – Winston Churchill, UK Prime Minister and wartime leader born on this day in 1874