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.
The past fiscal year has been notable for the record returns generated by some of the top public pension funds in the US and abroad. What’s interesting is that many of these superlative gains were propelled by private equity investments that put even public stock returns in the shade.
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Vanguard, the world’s largest investment firm, has entered the private equity business. The firm will provide PE in a suite of new funds and target pensions, endowments, and other institutions. The company forged a partnership with HarbourVest to offer “qualified” investors with access to new funds. HarbourVest manages roughly $68 billion in assets.
Black Dragon Capital, a private equity firm, has agreed to acquire all of Grass Valley from Belden Inc. (NYSE: BDC), reports TVTechnology. According to a statement, Black Dragon intends to take Grass Valley to the next level with a cloud-enabled, software-based business model. It intends to develop Grass Valley into a market leader in digital media and open and inclusive cloud technology.
Carlyle Group (NYSE: CG) is the last of the “Big Money” private equity and asset managers to report fourth-quarter earnings. It was a solid quarter for the Washington DC-based alternative investment manager, although it fell shy of last year’s results. The 2018 quarter had the extra benefit of $32 million of $32 million of net insurance recoveries, high transaction fees, and catch-up management fees that were not duplicated in the fourth quarter of 2019.
Humana (NYSE: HUM), the U.S. insurance giant, has launched a joint venture with a private equity firm. The agreement will see Humana launch new primary-care centers for Medicare Advantage enrollees. Humana’s deal is with Welsh, Carson, Anderson & Stowe.
Private Equity: Blackstone Tactical Opportunities Announces $1.4 Billion Final Close of Phoenix Tower International Project
Blackstone Tactical Opportunities funds completed the recapitalization of Phoenix Tower International. The deal will allow the wireless communications infrastructure provider to execute on its global infrastructure business plan.. Tac Opps has now raised $1.4 billion of dedicated capital for PTI.
The KKR earnings report arrived this week. The alternative investment giant said that assets, fees and book value all grew by double digits in 2019. Revenues for the quarter ending December 31, 2019, were $1.06 billion compared to $(178.1) million for the same period in 2019. Revenues for all of 2019 were $4.22 billion compared to $2.39 billion in 2018.
Unigestion, a Swiss-based PE firm, has launched a new Luxembourg-domiciled fund. Its Unigestion Secondary V will focus on secondary opportunities and deals below 50 million euros. “Unigestion follows a rigorous due diligence process, applying a bottom-up evaluation of every single portfolio company which includes detailed financial modeling, interviews with senior company management and debt analysis,” the firm said in a statement.
Apollo Global Management earnings arrived this morning. Apollo reported fee-related earnings of $0.59 per share for the quarter and $2.19 per share for the full year. That is a gain of 17% over 2018. The demand for private equity and private credit firms has been exceptionally strong thanks to extended stock prices and low-interest rates and Apollo was well-positioned to benefit.
Steve Pagliuca, the co-chairman of Bain Capital, refuted claims made by Democratic frontrunners about the role of private equity. During the World Economic Forum in Davos, Switzerland, Pagliuca touted the role of Bain in job creation. The co-chairman said that firms purchased by Bain have grown revenue two times faster than the S&P 500 companies.
Private equity firm BGH Capital has thrown its hat into the ring to acquire Village Roadshow.
On Friday, BGH made an unsolicited counter-offer of $4 per share for Village. A month ago, Pacific Equity Partners (PEP) had offered to take over Village Roadshow, a cinema owner and Gold Coast theme parks operator, for $3.90 a share.
CITIC Capital, the Chinese private equity firm, is bidding for a 22% stake in the Chinese and Hong Kong businesses of McDonald’s Corp. The firm is looking to put some of the $2.8 billion that it raised for its fourth Chinese buyout fund in August 2019.
Chicago-based Private Equity Fund Wynnchurh Closes Fifth Tranche at $2.3 Billion. The fund was launched in September with a target of $1.6 billion, and received a solid oversubscription. It specializes in investing in middle-market companies.
Lexington Partners announced the closing of Lexington Capital Partners IX which raised $14 billion of commitments. Lexington Capital is one of the largest funds that invest in private equity and alternative assets. It focuses on sectors globally through a full range of negotiated secondary market transactions.
The KKR Next Generation Technology Growth Fund II has closed. KKR announced a $2.2 billion fund dedicated to growth equity investment opportunities in the technology space in North America, Europe, and Israel. The fund seeks investments outside the major technology centers such as Silicon Valley and Boston.
Blackstone CEO Steve Schwarzman confirmed our concerns about dry powder and higher valuations during an interview at the World Economic Forum. Schwarzman discussed the lack of opportunities with CNBC. The alternative assets executive cited higher asset prices, expectations for global growth, and lower interest rates for there being “much fewer things” to buy.
Private equity leader KKR released its latest macro outlook this week. Head of Global Macro & Asset Allocation Henry McVey outlines where KKR thinks the best opportunities will be this year. McVey is not as optimistic this year as he had been in years past writing.
The Global Alternatives Outlook was released by JPMorgan Asset Management this week. The report provides a 12-18-month outlook across key alternative asset classes. The report also the views of the CEOs, CIOs, and strategists from the firm’s 15 distinct alternatives investment engines. We take a look at the key takeaways from the report.
In an impressive encore, AMP Capital’s latest Global Infrastructure Fund II romped home with $3.4 billion, well-ahead of its targeted raise of $3 billion. The predecessor fund raised $2.4 billion in January 2017.
New York advisory Aksia will purchase private equity consultancy TorreyCove Capital Partners. The deal will see the two firms marry under the name Aksia. Aksia has specialized in private credit and hedge fund strategies. TorreyCove has specialized in private equity and real asset strategies.
Pitchbook data reveals that private equity firms shattered fundraising records last year as investors seek alternatives to traditional markets. A new report shows that PE shops raised more than $300 million last year. That figure is 52% higher than the $198 billion raised in 2018. It also shatters the previous record of $241 billion from 2016, Pitchbook says.
The Environmental-Social-Governance (ESG) space commands a lot of investing heft these days. That much is evident from the confidence placed by CVC Growth Partners in EcoVadis, a provider of sustainability ratings for global supply chains. CVC’s investment of approximately $200 million is validation of its view that ESG is extremely important to business success over the long term.
Nuveen has created a unique direct access private capital platform by bringing together its private equity and junior capital group with Churchill Asset Management, its middle-market senior loan and unitranche financing business. for 2018 at the USA M&A Atlas Awards.
The new platform, to be known as Churchill, would manage over 250 portfolio investments and more than 150 limited partner investments in middle market private equity funds. It would be a one stop capital source for private equity firms and institutional investors.
Manulife Investment Management has closed $1.5 billion in commitments for a new fund, Manulife Private Equity Partners (MPEP). MPEP is the company’s first fund-of-funds product. It is part of the firm’s shift toward specialized asset management solutions for global investors.