Maitland/AMO Private Equity Monitor – 6 September 2019

6th September 2019

Worth a read


The hunt for yield keeps private equity buoyant

According to the Financial Times, the sound of investors gasping for higher returns in a desert of low interest rates has rendered private equity an oasis of opportunity. But there’s obviously a hurdle: you need hundreds of millions of dollars to gain access to the largest buyouts. To try and circumvent this, some entrepreneurial types are providing a solution. Amid this increased demand from high net wealth individuals to have a seat at the top private equity tables, new, smaller firms, with minimum investments of €100,000, individuals can access household names such as Cinven and Carlyle. Albeit from a high chair…

Invest in public markets or private equity? Maybe both?...

Certain things just don’t go well together. They don’t mix: oil and water; the grape and the grain;  Boris and, er, everyone else; public markets and private equity. Or so you would think. According to The Financial Times, private equity firm EQT are looking to list. But why? Its Swedish management team say that it is so its founders can exit – but a more credible reason, the article notes, is that it wants to be financially flexible, noting the clear and present danger of becoming a financial conglomerate, with a bulging portfolio -with almost zero control.

No more room at the inn

I always used to hitch a lift to work until my friend-cum-chauffeur took umbrage at my freeloading and sent me packing off onto the bowels of the London underground. It’s a similar story too for general partners and private equity firms. Private Equity News reports that the days of limited partners investing alongside private equity firms for little or no fees are numbered.  The article notes that this marks a turning point in the tug of war between Limited Partners v General Partners.

A slowdown's coming - but that's not necessarily a bad thing...

Private Equity News cites a survey that cites 70% of private equity firms arguing that despite an impending slowdown, they suspect that they’ll actually find more attractively priced businesses this year. Interestingly 35% of corporaets cited it as a reason to make deals.  A reason given for the potential uplift is that more and more companies will turn to private equity in increasing quantities – when they run out of sufficient cash reserves.


Wall of money


Vista closes record-breaking fund

Vista Equity Partners has raised $16bn for a record-breaking technology fund – Vista Equity Partners Fund VII. Vista also plans to contribute about 4-6% of the fund’s total size in addition. The fund is the largest technology-focussed fund raised by an independent private equity firm.

Innova closes sixth fund

Innova Capital has closed Innova VI at €271m. The fund received commitments from investors in Europe and North America, with over two thirds of the capital raised coming from existing investors. Innova VI will seek to invest in medium-sized businesses with enterprise values between €50m to €150m, much like its predecessors.

UBS commits to KKR's impact

UBS has committed $225bn to KKR’s Global Impact fund, a contribution it says is one of the largest to date. The fund invests in companies that tackle environmental and societal issues and has already exceeded its $1bn goal.

Foresight closes regional fund

Foresight has closed it’s largest regional fund on £100m. The East of England fund will act as an evergreen fund. Alongside the East of England fund, Foresight has a £39m fund focused on Nottingham, a £38m Midlands-focused fund, a £20m fund focused on Scotland and a £58m regional fund that is backed by the Greater Manchester Pension Fund alongside the South Yorkshire Pension fund.


Deal chart


Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
Lewmar MarineLipper ComponentsBestport Private EquityUndisclosed, 6.1x return05/09/2019UKManufacturing
AsolviVolpi CapitalViking VentureUndisclosed05/09/2019NorwaySoftware
CM Investment Partners LLCInvestcorp-Undisclosed04/09/2019USFinancial Services
Euro Techno Com GroupThe Carlyle Group-Undisclosed04/09/2019FranceTMT
Instinctif PartnersLDCVitruvian PartnersUndisclosed04/09/2019UKCommunications
Aston LarkBowmark CapitalGoldman Sachs Merchant BankingUndisclosed03/09/2019UKFinancial Services
KallikFPE Capital-Undisclosed02/09/2019UKSoftware
James BriggsTetrosylEndlessUndisclosed02/09/2019UKChemicals
FabriweldComhar Capital-Undisclosed30/08/2019UKManufacturing
Jet CeuticalsNordwind Capital-Undisclosed30/08/2019GermanyPharmaceuticals

Movers and Shakers


Europe

Simon Tilley has left Inflexion Private Equity Partners to join investment bank Stephens as managing director responsible for European sponsor coverage.

DC Advisory has announced the opening of a Milan office, to be spearheaded by newly appointed CEO Alberto Vigo.

Swedish pension fund AP1 has fired its CEO Johan Magnusson for breaching internal trading rules.

KKR has appointed Jam Baumgart as head of real estate in Germany, joining from Patrizia Alternative Investments.

Independent investment bank Greenhill & Co has recruited Amélie Négrier-Oyarzabal as a managing director and head of France from Lazard.

BNY Mellon has hired Greg Kok and Robert Burchett-Coates to strengthen its EMEA Private Markets team, in Luxembourg and London respectively. Kok joins from Maitland, while Burchett-Coates was a director at an independent trust.

North America

The former CEO of Domino’s Pizza in the US, Patrick Doyle, has joined Carlyle as an executive partner, to help transform businesses through tech innovation.


From the horse’s mouth...

“Hopefully when a company re-emerges from private ownership it is not inherently weakened” – Paul Lee, senior advisor at the Investor Forum

“There is only so much co-investment opportunity a GP is going to sanction. If they are earning much lower fees, where is the incentive to continue to drive their business forward?” – Matthew Craig-Greene, managing director at MJ Hudson

“When the government violates the people’s rights, insurrection is, for the people and for each portion of the people, the most sacred of the rights and the most indispensible of duties”Marquis De Lafayette, French military officer born on this day in 1757