Maitland/AMO Private Equity Monitor – 30 November 2018
Worth a read
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.
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”.
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.
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.
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
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.
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 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.
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.
|Acquisition Target||Buyer||Seller||Value||Date Announced||Region||Sector|
|Lakesight||TKH Group||Ambienta||Undisclosed, 10x return||29/11/2018||Germany||TMT|
|GAC||Gilde Buy Out Partners||Pon Holdings||Undisclosed||29/11/2018||Germany||Automotive|
|Mycom OSI||Inflexion||Clearlake Capital Group||$128m||28/11/2018||UK||TMT|
|Advanced Capital SGR||Capital Dynamics||-||Undisclosed||27/11/2018||Switzerland||Financial Services|
|Compo Expert||Grupa Azoty||XIO Group||Undisclosed||27/11/2018||Germany||Agriculture|
|SeraCare Life Sciences||LGC||Linden Capital Partners||Undisclosed||27/11/2018||USA||Healthcare|
|Pirtek Europe||PNC Riverarch Capital||Halifax Group||Undisclosed||27/11/2018||UK||Hydraulics|
|A+R Betriebsgesellschaft||Schönes Leben||-||Undisclosed||27/11/2018||Germany||Healthcare|
|Veltec Group||Deutsche Beteiligungs AG||Triton Partners||c. €25-50m||26/11/2018||Germany||Energy|
|Imopólis - Sociedade Gestora de Fundos de Investimento Imobiliário||Värde Partners||-||Undisclosed||26/11/2018||USA||Real Estate|
|AHT Cooling Systems||Daikin Industries||Bridgepoint||€881m||26/11/2018||Austria||Industrials|
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”.
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