Global private equity firms are sitting on more than $2.1 trillion in “Dry Powder.” Their investment decisions and purchasing power will shape the public and private investment markets in ways that shape the future of the global economy. DailyAlts provides constant updates and insights on deal-making, regulatory shifts, global capital flows, and more.
Private Equity: Nutanix Gets $750 Million Investment from Bain Capital Nutanix — a leading cloud computing company — announced Bain Capital Private Equity’s $750 million investment in the company. Chairman and CEO of Nutanix Dheeraj Pandey claimed “Bain Capital Private Equity has deep technology investing experience and a strong track record of helping companies scale…Bain…
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Blackstone earnings (NYSE:BX) arrived before the bell Thursday. While the private equity firm fell short of analyst expectations, the firm still managed to generate significant cash flows in the quarter. The firm said that they had produced Distributable earnings during the first three months of the year of $.46 a share. The consensus Wall Street…
Although oil prices have risen today, the price of oil remains at historically low-price levels. This is an opportunity for deep-pocketed private equity firms that own a diversified portfolio of companies.
However, it is a calamity for those funds that specialize in energy investing.
Victoria’s Secret had a new majority owner in Sycamore Partners. However, the private equity firm is trying to walk away. As a result, shares of L Brands (NYSE:LB) – the current owner – plunged more than 20%.
McVey outlines his thoughts in his latest report titled Keep Calm and Carry On. He expects the economy to see a sharp downturn during the second quarter. McVey also expects more of a U-shaped recovery than a V-shaped one. He thinks that the economy may experience sustained demand issues as a result of the massive wave of unemployment in the United States and Europe. He does suggest that the increased unemployment benefits will offer full income replacement or many households allowing demand to at least maintains at a decent, but lower pace.
Global consulting firm McKinsey & Co. has published a study that examines what private equity firms can do to outperform their peers during times of crisis. They examined what high performing private equity firms did during the Great Financial Crisis of 2008-2009 did to achieve outstanding results. The consultants who worked on the project suggested…
KKR is suspending its efforts to exit its investment in Goodpacks, a Singapore based supply chain solutions company. While the company’s primary container leasing business to food and rubber companies has remained steady with little to no impact form the coronavirus economic slowdown, the bids received by KKR were far beyond what the private equity…
Leon Black made a rare appearance in the media yesterday. The co-founder of alternative asset manager Apollo Global Management (NYSE: APO) appeared on CNBC along with Aramark (ARMK) CEO John Zillmer. During the conversation, the two discussed their NYC Health Heroes program. Aramark, the world’s largest U.S.-based provider of food, facilities, and uniforms, partnered with Mr….
Private equity funds could face a huge hit to valuations as of the end of the third quarter, according to MSCI Research.
Using their private equity valuation model, they determined some private equity funds could take a Q1 write-down of portfolio companies by as much as 35%.
Investors who recently compiled their year-end valuations may have a false sense of security right now. Many could be shocked in a few months when they realize the devastation of the first quarter.
Private equity-backed Envision Healthcare is struggling to deal with the dramatic loss of revenues. Patients have turned to telehealth resources and canceled ambulatory surgeries. Envision provides medical staff to hospitals and operates surgery centers and is owned by KKR (NYSE: KKR). The company has seen its business drop by about 70% in a very short period of time. More than 90 of its centers are closed because of the spread of the coronavirus across the United States.
The private equity industry is losing the fight to gain access to bailout funds provided under the stimulus package passed to help businesses recover from the economic impact of the coronavirus.
The funds are only available to companies with less than 500 employees.
While private equity firms own lots of businesses that would qualify for the funds, the legislation bundles all their affiliated companies and counts them as just one company making them ineligible for loans from the Small Business Administration.
Apollo Global Management Co-Founder Marc Rowan sent a letter to the firm’s investors this weekend that suggests that if the Fed does not take drastic measures, the economy will be in danger of collapsing.
Silver Lake Partners is going big with its latest fund.
The technology-focused private equity fund wants to raise a new fund worth $16 billion.
Raising funds as market prices have been collapsing is a solid strategy. It will give the PE an enormous amount of capital to buy companies at distressed prices. With losses mounting in current portfolios, however, one must wonder if institutional investors will step up and make new investments.
TSG Consumer Partners announced that it has acquired a majority stake in Pathway Vet Alliance. The consumer-focused PE shop purchased the assets from Morgan Stanley Capital Partners funds. The current management at Pathway will remain in place as part of the deal.
Dave and Busters (NASDAQ:PLAY) have been hard hit by the economic downturn.
The restaurant and arcade company closed its stores across the United States. It furloughed at least 15,000 hourly team members, store management, and corporate staff. Meanwhile, it cut the compensation of the senior leadership team by 50 percent.
And the Board of Directors has suspended Directors’ cash compensation for the remainder of the year.
So… what next?
KKR & Co (NYSE: KKR) has shelved a plan to sell Singapore-based Goodpack, a Singapore based shipping containers, and logistics services.
They had bids for the company that was said to be as high as $2 billion, but buyers have pulled back as the spread of the virus has made the company much less attractive at that price level.
This is one example of active triage on portfolio companies and dealing with the limitation of getting things done when under a lockdown order in may cities.
All around the world, private equity firms are scrambling to adapt to the new environment caused by the rapid spread of the coronavirus. Many countries, especially in the developed world, have shut down large parts of their economies to halt the virus’ spread. The resulting global recession will strain companies that private equity firms own….
Ardian has raised $18 billion for a new fund to buy stakes in private equity funds. Reports say the European private equity manager could close the fund to new investors as soon as next month.
The $2 trillion stimulus package passed by Congress and signed by President Trump last week contains wins and losses for the private equity industry. While none of the legislation was directly aimed at the industry, restrictions on which companies can access aid will affect those companies with private equity ownership.
Private credit has been one of the fastest-growing areas of the credit market since the great credit crisis ended a decade ago. As banks stepped back from small and mid-market lending, especially in riskier areas like expansion and takeovers, funds sprang up to fill the void for a price. Institutions pensions placed enormous sums of…
Goldman Sachs (NYSE: GS) is said to have released a report advising companies to ignore the advances of private equity firms right now.
With valuations compressed dramatically in a very short period of time, private equity is looking to deploy its cash stockpile of around $1.5 trillion. Goldman, along with other investment banking firms, is advising clients that want to remain independent to take advantage of bridge loans and other funding provisions in the stimulus package that is being passed today rather than sell equity at bargain-basement levels.
Private equity managers will likely deploy more than $2 trillion in cash that has sat on the sidelines during the recent carnage and volatility in the financial market.
The American Investment Council released a report this week that shows that the private equity industry invested $309 billion in 4,788 businesses across all regions of the country.
The median investment in each private equity-backed business was $58.9 million. The top three sectors receiving the most private equity investment in 2019 were Business Products & Services ($93 billion), Information Technology ($64 billion), and Healthcare ($45 billion).
McKinsey and Company just published guidance for the private equity industry. In the paper titled “Private Equity and the New Reality of Coronavirus.” They suggest that “private equity (PE) firms and their portfolio companies come into the crisis riding a decade-long wave of growing transaction volumes, valuations, and fundraising. That position of strength may prove a bulwark in the months ahead, especially for firms that have exercised prudence recently.
In the largest deal since the coronavirus began crashing markets and economies, KKR (NYSE: KKR) is buying UK recycling company Viridor.
It will acquire the firm from Pennon Group for £4.2 billion in cash. Net proceeds to Pennon Group will be 3.7 billion pounds, with additional consideration of 200 million pounds contingent on future events. The Pennon Board of Directors said it intends to use the net cash proceeds to reduce Pennon’s company borrowings and make a return to shareholders.