| | | | | VC is performing better than ever. Why are so few first-time funds being raised? | |  | | (lemono/Getty Images) | | | | Limited partners have been pouring money into venture capital at record rates, but their excitement about the asset class has not extended to first-time managers. In fact, the number of inaugural funds has dropped sharply since 2018, according to PitchBook data. Ironically, the decrease in first-time funds is largely due to venture capital's recent success, LPs say. - Established managers are raising larger funds at a faster pace, taking up a bigger portion of LPs' VC allocation.
- The venture market's recent strong performance has resulted in some LPs suddenly finding themselves overallocated to the asset class.
- Despite these challenges, there's no shortage of new managers trying to raise their first fund.
| | | | | | | | | | KKR, Apollo see profits surge, buoyed by asset sales amid economic recovery | |  | | (Viaframe/Getty Images) | | | KKR and Apollo Global Management are the latest publicly traded private equity shops to announce a surge in net income during the first quarter of 2021, buoyed by asset sales in a rebounding economy. - KKR posted a profit of $1.67 billion in Q1, compared with a loss of $1.28 billion in the first quarter of 2020, when the pandemic upended the global economy. Apollo posted a profit of $678.9 million in Q1, compared with a loss of $996.2 billion in the same period last year.
- KKR credited $461 million in realizations to its asset sales of FanDuel and BridgeBio. Apollo posted realized proceeds of $3.7 billion, driven by stake sales of subprime lender OneMain and revenue from Cox Media, among other factors.
- Apollo's private equity portfolio appreciated 22%, besting the S&P 500's 5.8% gain, as well as gains in the private equity portfolios of rivals KKR (19%), Blackstone (15%) and The Carlyle Group (15%).
- Both firms reported a bump in assets under management, reflecting a broader push from LPs to pour money into alternative assets. Apollo's AUM jumped to $461.1 billion, up from $455.5 billion at the end of 2020. KKR's AUM increased to $367 billion, fueled by the firm's acquisition of insurance giant Global Atlantic.
Related read: Blackstone posts highest profit yet, powered by growth-equity and SPAC deals | | | | | | | | | | | | Because you can't compete without going digital | | Private capital firms are rethinking their capital sourcing strategy with one focus: digital acceleration.
At a time when social distancing, travel bans and a globally distributed workforce have become the norm, firms are looking to technology to close physical and logistical gaps. In addition, investors expect to use digital channels for every interaction, from fundraising to day-to-day information requests and ad hoc queries.
Modern technology solutions and services have been available for some time, but until now, adoption has been slow. CTOs and CFOs across the private capital markets have sprung into action and are accelerating their digital strategy with solutions that easily scale and integrate to define brand and enhance their competitive edge.
Learn more about why going digital matters | | | | | | | | | | | After minting billions in the PE arena and creating 13 blank-check companies, Alec Gores has become the man with more SPACs than anyone. [The Wall Street Journal]
Airbnb CEO Brian Chesky on leadership and how he avoided panicking as the company's bookings plummeted during the pandemic. [Financial Times]
Deer can regrow antlers, and humans can replace their livers. What if we could persuade the body to regenerate its limbs? [The New Yorker] | | | | | | | | | | | Since yesterday, the PitchBook Platform added: | | 554 Deals | 1478 People | 338 Companies | 36 Funds | | | | | | | | | | | | | | | | | | | | 2007 Vintage Global Secondaries Funds | | | | | | | | | | | | | Will 2021 see another record for VC investment in life sciences? | | The latest edition of Orrick's life sciences venture investing series is now available, featuring analysis of key datasets and expert commentary on emerging trends. Highlights include: - A candid roundtable with luminaries focused on life science companies that leverage technology spun out from academia
- Data on pre-money valuations and financing sizes
- Analysis of volume by series and size
Read it now | | | | | | | | | | | | Kajabi secures $550M from Tiger Global, others | | | Kajabi, the creator of an ecommerce platform to help entrepreneurs build, market and sell educational content, has raised $550 million at a valuation of more than $2 billion. The deal was led by Tiger Global and included participation from TPG Capital, Tidemark, Owl Rock Capital and Meritech Capital. Founded in 2010, the Irvine, Calif.-based company was not backed by outside investors until 2019. | | | | | | | | HoneyBook vaults to $1B+ valuation | | | | | | | | | Wearables startup raises $100M | | | | | | | | | SoftBank leads $75M round for WorkBoard | | | | | | | | | Index Ventures backs $50M round for Persona | | | Persona has raised a $50 million Series B led by Index Ventures, with participation from Coatue Management. The San Francisco-based company is the developer of a platform that helps companies including Sonder, Brex and Udemy protect, verify and manage customer identities. Mark Goldberg, a partner at Index Ventures, will join the company's board. | | | | | | | | | Vanta has raised a $50 million Series A led by Sequoia, with existing backer Y Combinator also participating. The San Francisco-based company is a developer of compliance and security automation software designed to protect consumer data. Its customers include Lattice, Calm and Loom. | | | | | | | | | | | | CVC Capital devotes $250M to Acronis | | | CVC Capital Partners has led a $250 million investment in Acronis, valuing the Swiss cybersecurity and data-recovery provider at roughly $2.5 billion. Funds for the investment came from CVC Capital Partners VII. In 2019, Acronis raised a $147 million round led by Goldman Sachs that valued the company at around $1 billion. | | | | | | | | American Securities seals solar power deal | | | | | | | | | Long Arc Capital acquires stake in cloud-based software company | | | Long Arc Capital has acquired a majority stake in Minneapolis-based Agile Frameworks, a provider of cloud-based software for project workflows, data management and analytics that's used in the architecture, engineering and construction services sectors. Agile was founded in 2011 by Braun Intertec, a provider of environmental and geotechnical engineering services. | | | | | | | | Provation picks up medical data management company | | | Provation, a Clearlake Capital-backed healthcare software and SaaS solutions company, has acquired iProcedures. Based in Florida, the company is a provider of medical data management software. | | | | | | | | | | | | KKR pulls in $18.5B for latest buyout fund | | | KKR has raised $18.5 billion for the firm's latest North America buyout fund, Bloomberg reported. Dubbed KKR North America Fund XIII, the vehicle has already surpassed a predecessor that brought in $13.9 billion in 2017; the new fund will reportedly close officially in a few months. | | | | | | | | Bain Capital collects $11.8B for Fund XIII | | | Bain Capital has brought in $11.8 billion for its 13th flagship fund, surpassing a $9 billion target, Reuters reported. Some $10 billion came from outside investors, with the remaining amount reportedly invested by current and past employees. The firm previously raised $9.4 billion for its 12th flagship fund in 2017. Bain's latest vehicle will invest in the healthcare, business services, finance and industrial sectors, The Wall Street Journal reported. | | | | | | | | Tiger Global eyes $10B fund | | | Tiger Global is looking to raise $10 billion for a new venture vehicle, only a month after closing a $6.7 billion fund, Axios reported. In recent months, the New York-based investor has been backing startups at an unprecedented pace and winning deals by offering higher prices than traditional venture firms. | | | | | | | | | | | | | | | | | | | | Who's in the newsletter today? | | People | | | | Investors | | | | Companies | | | | | | | | | |
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