Maitland/AMO Private Equity Monitor – 14 September 2018

14th September 2018

Worth a read

Private equity behemoth EQT mulls a public listing

The Swedish private equity giant is mulling whether or not to venture off into the public markets. If so, it would follow in the footsteps of US titans Blackstone Group and KKR. Going public could be something of a trend for major investment firms: alongside Blackstone and KKR, Apollo Global Management and Carlyle Group have also gone public recently.

Inside the decline of Abraaj

The deal just didn’t fly. The critical failure to sell a majority stake in Pakistan’s K-Electric sealed the fate of one of the Middle East’s glittering success stories in the private equity panoply. The failed sale, followed swiftly by provisional liquidation amid allegations of misusing investors’ money in Abraaj’s $1bn healthcare fund all spelled the death knell for Abraaj.

What has PE learned from the financial crisis?

The IMF says that global growth in 2018 will average 3.9%, making it a record. Harvard University has now looked into what private equity did in the financial crisis and how it can apply those lessons to what could be a “bumpy ride” in 2019 as global growth slows. One of the key points of difference, says Josh Lerner of Harvard, is that private-equity owned businesses were not as leveraged as in the past.

Bond investors hurry to get a piece of the largest LBO pie in a decade

What a difference a decade makes. Once private equity giants Blackstone and Carlyle had made their respective intentions known, investors rushed in where angels fear to trea-oh sorry, wrong song. Anyway, investors have piled in (“budge up!” they chorus)  to buy more than $20bn of junk-rated debt backing two whoping LBOs on which private equity giants Blackstone and Carlyle are relying on. For Blackstone, it’s a controlling stake in Thomson Reuters – cocking a snook at Bloomberg  (Mike and Steve: The Movie, anyone?) and for Carlyle, it’s to fund a purchase of Azko Nobel’s Specialty Chemicals arm.

Partners Group looks to longer holdings

Partners Group has said that it expects long-term value assets to account for a greater proportion of its portfolio and has started holding companies for longer periods. In some cases, the investment period could be as long as 15 years, above the average for the industry of five. Steffan Meister, Chairman, comments that the shift will make Partners more of an industrial partner.

Wall of money

Carlyle closes US real estate vehicle on $5.5bn

Carlyle Group has closed its latest US real estate fund at $5.5bn, above the initial target of $5bn which makes this fund its largest ever for the asset class. The previous vehicle closed on $4.2bn in 2014.

Capvis closes latest fund at almost €1.2bn

Mid-market buyout firm Capvis has closed its latest fund at a little shy of €1.2bn, exceeding the €1bn target. The fund will target investments in Switzerland, Germany, Italy and Benelux.

Bowmark Capital sets target of £600m for its largest ever fund

London-based Bowmark has said it is preparing to launch its sixth buyout fund which, with its target of £600m, would be the firm’s largest ever. The firm raised £375m for its previous vehicle in 2014 in only ten weeks.

Carlyle raises $612m for new CLO

Carlyle has said it has collected $612m for its newest collateralised loan obligation, the third issue it has raised in the US this year. The firm plans to invest in a portfolio of senior secured leveraged loans.

Buxton's fund seeks £200m for a private equity trust

Richard Buxton’s new-ish fund business is looking to raise a cool £200m for a private equity trust. This is OMGI’s first foray into the investment trust universe. The trust will typically hold between 7 – 15 investments.

Deal chart

Acquisition TargetBuyerSellerValueDate AnnouncedRegionSector
Luminor GroupBlackstone GroupNordea Bank & DNB Bank€1bn13/09/2018BalticsFinancial Services
YourWelcomeLivingbridge-Undisclosed13/09/2018UKTravel & Leisure
Labrador LtdLivingbridge-Undisclosed13/09/2018UKEnergy
Reliant Rehabilitation HoldingsH.I.G. CapitalDW Healthcare PartnersUndisclosed13/09/2018USHealthcare
SedgwickCarlyle Group-$6.7bn12/09/2018USFinancial Services
Thomas Flohr-run aviation businessRhône Group-$200m11/09/2018UAEAviation
Love Energy SavingsLDCNVM Private Equityc. £25m10/09/2018UKEnergy

Movers and Shakers

UK & Europe

BC Partners has hired Tania Daguere Lindbäck from Blackstone, who will become the firm’s sole female partner. Lindbäck is set to start in her role at the start of 2019 and will be based in London.

Oaktree Capital has hired Peter Preisler as Head of Marketing for Europe and Africa. He joins from T. Rowe Price, where he led the firm’s institutional sales effort for 15 years.

Tikehau Capital has appointed Ephraïm Marquer as its Group Head of Compliance. He joins from BNP Paribas‘ asset management division.

Guillaume Girard has joined Jolt Capital as a Partner from A Plus Finance, where he was an Associate Director specialising in tech transactions.

Trudy Cooke is reported to have left her role as COO of Terra Firma, leaving the firm with no women in senior management.

From the horse’s mouth...

“Never knowingly undersold.” – the price promise of John Lewis Partnership whose profits collapsed by nearly 99%

 “I never thought of myself as a king. People really want you to be their deity. They forget the fact that you are a person who has feelings and doubts.” – John Guttfreund, dubbed the “king of Wall Street”, born on this day in 1929

“I was hoping the market would show a bit of discpline… but that hasn’t been the case.” – John McClain, Bond PM at Diamond Hill on the bid to buy the debt for Blackstone’s Thomson Reuters deal