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| Private equity's mega-funds are making big moves in 2021 | |  | | (KTSDesign/Getty Images) | | | It appears that mega-funds are the hot private equity investing topic of 2021. - This year is looking to be a banner one for private equity's mega-funds, with the likes of Hellman & Friedman closing its 10th namesake vehicle at $24.4 billion and The Carlyle Group reportedly eyeing $27 billion for its next flagship fund—in what would be the largest private equity vehicle of all time.
- In all, 12 buyout and growth mega-funds—defined as any fund that has raised over $5 billion—have already closed this year. For context, 18 mega-funds were closed in 2019, and 16 in 2020.
- According to PitchBook data, at least seven of those 12 funds have raised over $10 billion each.
| | | | | | | | | | Why the rise in GP stakes deals doesn't mean a decline in opportunities | |  | | (quickshooting/Getty Images) | | | GP stakes deals have surged in popularity over the past five years, with tens of billions of dollars flowing into the strategy. Yet the blistering growth has some industry observers questioning its future—and what investment prospects may remain.
Plenty, as it happens. GP stakes deals are in a lush opportunity landscape, with $100 billion-plus in potentially available value, PitchBook analysts argue in our latest research note. Among the takeaways: - The middle market offers the best supply-and-demand dynamics compared to larger or smaller GPs, with less than $10 billion currently targeting the space and over $40 billion in capacity.
- Buyout firms have long been the favored choice for GP stakes investors, yet growth equity targets have become increasingly attractive based on their return profiles, fees and holding periods.
- Private capital managers are opting for more IPOs, signaling a change in how they view outside ownership. More may be willing to sell stakes—or the top end may have less capacity than expected if firms go straight to the public markets.
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| A message from CohnReznick | | |
| What investment strategy best prepares for increased infrastructure spending? | | As plans for US infrastructure spending continue to unfold, the size and scope of the possibilities have drawn the attention of the private investment community. In entering that marketplace, some investors will choose direct investment in projects, while others will acquire portfolio companies that provide supporting products and services.
What's the best strategy? It can depend on the scale and scope of the project, and the investor's size and expertise. Infrastructure projects resemble lifecycles, and investors are likely to play different roles along the way. Designing, building, operating and maintaining these projects requires one specialized skillset, operating portfolio companies another. Industry-specific qualifications will be important for both investors and service providers.
For more detailed infrastructure intelligence and updates, visit CohnReznick's Infrastructure Resource Center. | | | | | | | |
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| | A look at why America's investing boom goes far beyond Reddit message boards, GameStop and Robinhood traders. [The Atlantic]
Many buyout firms are bidding for publicly traded companies in the UK at a faster rate than they have in years. The reason? Investors think big assets are going for cheap in a post-Brexit world. [The Wall Street Journal]
Cross-contamination in the prescription drug industry is rampant. Just ask Brady Ellison, a three-time US Olympic medalist in archery who was almost disqualified because traces of a banned drug were found in his thyroid medication. [Bloomberg] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 452 Deals | 1429 People | 370 Companies | 33 Funds | | | | | | |
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| 2015 Vintage Global Secondaries Funds | | | | | | |
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| A message from UMB Fund Services | | |
| Ask these questions before you commit to any investor recordkeeping system | | Investors are increasingly demanding about reporting, leaving managers who rely on homegrown approaches or disjointed systems struggling to meet expectations. Ask these 10 questions to frame up your true needs regarding investor recordkeeping and reporting.
For starters, find out whether you're considering one integrated system or many separate ones. Understand whether a system will strengthen your brand or compete with it. Who owns the technology—and how often do upgrades occur? Can you get the development team's attention?
This checklist-style guide is relevant from marketing to compliance, so you'll be confident about getting your money's worth while best serving your investors.
Read the guide | | | | | | | |
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| NotCo picks up $235M Series D | | | NotCo, a plant-based milk and meat creator, has raised a $235 million Series D led by Tiger Global at a valuation of $1.5 billion. Other investors including DFJ Growth Fund, The Social Impact Foundation, Zoma Lab, and follow-ons L Catterton and SOSV also joined the round. The Santiago, Chile-based startup matches animal proteins to ideal plant-based ingredients with the help of proprietary AI technology named Giuseppe. | | | | | | | | | ByHeart has raised a $90 million Series B led by D1 Capital Partners, with participation from OCV Partners, Polaris Partners and others. The New York-based company is a developer of infant nutrition products. Founded in 2016, ByHeart was valued at $177 million in April 2020, according to PitchBook data. The startup launched a new platform in June that's designed to provide parents with resources and education on feeding decisions. | | | | | | | | SoftBank leads $75M round for pet tech startup | | | | | | | | | | Teamflow has raised a $35 million Series B led by Coatue. The San Francisco-based company offers a virtual office platform to help remote and hybrid work teams collaborate and manage operations. Teamflow was valued at $70.7 million this past March, according to PitchBook data. | | | | | |
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| Thoma Bravo to take software company Medallia private in $6.4B deal | | | Thoma Bravo has agreed to acquire Medallia, a San Francisco-based customer experience management provider, in an all-cash transaction that values Medallia at $6.4 billion. As part of the public-to-private agreement, Thoma Bravo will pay $34 a share for Medallia, which represents a 20% premium to the company's closing stock price on June 10, the day before initial reports of the deal surfaced. | | | | | | | | Stonepeak set to pick up Lumen's Latin American business for $2.7B | | | Stonepeak Infrastructure Partners has agreed to acquire the Latin American division of Lumen Technologies, a publicly traded telecommunications company, for $2.7 billion. AustralianSuper, Australia's largest pension fund, will invest alongside Stonepeak. Lumen currently controls some 450,000 route fiber miles and serves customers in more than 60 countries. The Latin American unit, which manages data centers and subsea and terrestrial fiber communications, will operate as an independent company based in the US, with the current Latin American leadership team remaining in place. | | | | | | | | Bruin lands sports simulator Full Swing | | | Bruin Capital has purchased Full Swing, a Carlsbad, Calif.-based golf technology and performance company, from North Castle Partners. Full Swing is a producer of multi-sport simulators for commercial, residential and entertainment venues, offering experiences in more than 13 sports. PGA TOUR pros Tiger Woods, Jordan Spieth and Jon Rahm are company ambassadors. | | | | | |
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| Leeds Equity Partners nearing $1.25B close for seventh buyout vehicle | | | New York-based Leeds Equity Partners is nearing a close of $1.25 billion for its seventh namesake buyout fund, according to The Wall Street Journal. The fund is reportedly expected to be wrapped up by the end of July. Leeds Equity closed its sixth vehicle in the series on more than $750 million in 2018. The firm typically targets middle-market companies in the education, information services, training and software industries. | | | | | |
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| SoftBank's Didi investment $4B in the red | | | SoftBank's investment in Chinese ridehailing giant Didi Chuxing is reportedly down some $4 billion after alleged data security lapses at the company. In 2019, SoftBank's Vision Fund paid a reported $11.8 billion for a 20.1% interest in the company. That stake is now worth about $7.8 billion on the NYSE. Didi Chuxing went public last month. | | | | | |
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| Aon, Willis Towers scrap $30B tie-up | | | Aon and Willis Towers Watson have agreed to call off a merger that would have created the world's largest insurance broker, after the Department of Justice sued to stop the deal on antitrust concerns. Aon originally agreed to acquire Willis Towers in March 2020 for around $30 billion in an all-stock transaction. The DOJ filed its lawsuit last month, arguing that the two companies' sale of assets in Europe didn't go far enough in avoiding a monopoly. As part of the cancellation, Aon will pay a $1 billion termination fee to Willis Towers. | | | | | | | | S4 to absorb Australia's Destined | | | London-based S4 Capital has agreed to acquire Destined, an Australian Salesforce partner providing cloud and marketing services to clients including Spotify, Panasonic, Opal HealthCare and others. The deal will allow the British ad group to expand its presence in the Asia-Pacific and on the Salesforce platform. | | | | | |
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"The pipeline of new startups also remains strong, as evidenced by capital pouring freely into first-time rounds. While first-time deal value has remained consistent in recent years, it reached €2.7 billion in H1 2021 and is on course to set a new annual record at the end of 2021."
Source: PitchBook's Q2 2021 European Venture Report | | | | | |
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