Maitland/AMO Private Equity Monitor – 5 July 2019

5th July 2019

Worth a read


Distressed real estate in the private equity crosshairs

The Financial Times writes that there has been increased fundraising from private equity funds for distressed real estate assets, in anticipation of a property slump. According to Preqin data, these funds have raised $8bn in the first quarter of 2019, compared to less than $1bn for the whole of last year. Cerberus and Lone Star are among the groups highlighted as having bought large amounts of real estate after the financial crisis, but rising property prices have made opportunities scarcer.

Should private equity be a retail investors' market?

The launch of “radical” platform Truffle Invest and other similar competitors has led to questions about whether retail investors should be exposed to the complicated private equity markets and the risks of investing in this type of company. Leading private equity industry figures suggest that “it is an extremely bad idea”, as alternatives are already proving difficult for sophisticated institutional investors. Private Equity News writes that those entrepreneurs launching such platforms claim to be responding to a flood of demand in the market.

The value creators

Private Equity News this week featured interviews with four executives from Actis, Kempen Capital Management, Earth Capital and Inflexion Private Equity on how they take different approaches to creating value for portfolio companies. ESG is clearly gaining increasing influence in the private equity industry and is one of the keys to creating value, according to Actis.

"A worrying period of decline"

According to figures from industry analysts Preqin, the private equity industry is raising more money than ever before but investors are growing increasingly cautious over the declining value of buyout deals. Financial News writes that despite the competition for deals, there is little evidence of fee pressure.


Wall of money


TPG raises nearly $14bn for funds

According to American regulatory filings, TPG has raised $11.2bn for its latest flagship buyout fund, TPH Partners VIII LP and another $2.57bn for TPG Healthcare Partners LP. The latter marks TPG’s first fund dedicated exclusively to healthcare deals.

Centurium Capital raises more than $2bn on debut

Tariff wars seem to be banished at Centurium Capital which has closed its debut dollar fund at $2bn. The firm plans to invest the fund in Chinese companies with an emphasis on healthcare services and consumer sectors.

Permira enters into growth

Permira is dipping its toe into the water for growth oriented technology investments and has launched a $1.7bn debut fund. The new fund apparently attracted “longstanding” Permira investors.

LGT closes second fund

LGT Private Debt has held a final close for its Crown European Private Debt II fund on €1.35bn, making it approximately three times larger than the first vehicle. The fund’s original target was €800m.


Deal chart


Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
1000headsPhoenix Equity Partners1000heads>£30m03/07/2019UKMarketing
Connect Managed ServicesApiary CapitalLDCUndisclosed03/07/2019UKTelecommunications
Juniper EducationHorizonJuniper Education£20m02/07/2019UKEducation
AreasPAI PartnersElior GroupUndisclosed02/07/2019FranceCatering
SteelSeriesAxcel ManagementL Catterton/ClearVue PartnersUndisclosed02/07/2019DenmarkGaming/Electronics
MetalprintHIG EuropeMetalprintUndisclosed01/07/2019ItalyMetal goods
SegulahIT-TotalIT-TotalUndisclosed01/07/2019SwedenComputer Services

Movers and Shakers


Europe 

Investment bank Baird has hired Simon Pearson and Justin Prichard to join its TMT team in London. Previously, Pearson and Prichard led EY‘s TMT M&A advisory practice

Curt Gunsenheimer has been appointed as managing partner at Iris Capital.

Paul Vider has been appointed by Partech which is building up its growth team in preparation for the launch of Partech Growth II.

Asia

BNP Paribas is due to cut a dozen analysts in Asia Pacific following an agreement to outsource coverage of stocks to Morningstar.


From the horse’s mouth...

“At some point they could kill the golden goose” – Steve Ketchum voices his concerns on private equity firms which are sabotaging the market by relaxing terms on loans to investors. 

“Much like in the UK, retail across Europe has a huge question mark over it” Keith Breslauer, Managing Director at Patron Capital

“There are three roads to ruin: women, gambling and technicians. The most pleasant is with women, the quickest is with gambling, but the surest is with technicians.” – Georges Pompidou, former President of the French Republic, born on this day in 1911