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In today's Daily Pitch, you'll find: - An analysis of US PE fund performance broken down by GP investment styles.
- PE firms have ramped up their participation in venture deals. What's driving the surge?
- Apax Partners and Warburg Pincus struck a $6 billion deal for the Dutch operations of T-Mobile.
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| Measuring the effects of specialization strategies in US PE funds | |  | | (Bet_Noire/Getty Images) | | | Specialization has been a defining theme among US PE firms for over two decades. Firms and funds have focused on geography, sector and investment type, such as buyout or growth equity vehicles.
Regardless of performance, many allocators appreciate the additional control this approach allows in portfolio construction and management. But the question remains: Does specialization, particularly by sector, lead to outperformance? Our latest analyst note explores this question. Takeaways include: - Buyout fund performance for generalist, targeted and specialist vehicles shows no clear outperformance trends among the three types over time based on public market equivalents.
- Metrics such as IRR also support the conclusion that no single style reigns supreme.
- A regression analysis illustrates that while there is no linear relationship between sector concentration and performance, funds that were classified into the targeted group had slightly lower average PMEs and IRRs than both generalist and specialist funds.
| | | | | | | | | | What's driving private equity's march on VC? | |  | | (Overearth/Getty Images) | | | Private equity firms now participate in more than half of all venture deals by value, a share that has risen sharply in recent years.
In five charts, we break down how nontraditional investors like PE firms became such a force in VC. - The risk-reward spectrum of late-stage VC is now squarely in the wheelhouse of PE investors and traditional asset managers.
- Pre-IPO rounds can be hugely lucrative. They're also a preferred method of securing an allocation in the subsequent IPO.
- Growth equity funds have boomed alongside VC fundraising, a trend that shows no signs of slowing.
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| A message from Twin Brook Capital Partners | | |
| Experience and relationships matter | | | Navigating the pandemic has highlighted the value of strong relationships and the importance of experience when it comes to underwriting and portfolio management, say Twin Brook Capital Partners' Drew Guyette, Tim Schifer and Tony Maggiore, who recently shared their thoughts on takeaways from the past 18 months and their expectations for the future. | | | | | | | |
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| Apax, Warburg set to pick up Dutch T-Mobile unit in $6B deal | |  | | (Andreas Rentz/Getty Images) | | | Apax Partners and Warburg Pincus have agreed to buy T-Mobile Netherlands from Germany's Deutsche Telekom and Sweden's Tele2.
The deal, which gives the mobile network operator an enterprise valuation of €5.1 billion (about $6 billion), coincides with Deutsche Telekom agreeing to boost its stake in T-Mobile US by 5.3% via a share-swap deal with SoftBank. - Deutsche Telekom will issue 225 million new shares to SoftBank at €20 apiece, in exchange for about 45 million T-Mobile US shares at around $118 apiece. The transaction will make SoftBank the second-largest private shareholder of Deutsche Telekom, with 4.5% ownership.
- Deutsche Telekom also plans to use the proceeds of the T-Mobile NL sale to buy another 20 million T-Mobile US shares from SoftBank.
- T-Mobile NL, which holds a 42% share of the Dutch mobile market, previously acquired fixed-line internet business Thuis in 2016 and formed a strategic partnership with KKR-backed Open Dutch Fiber earlier this year.
| | | | | | | | | | Silicon Valley is pushing for a bigger role in the defense industry, but rank-and-file workers are skeptical. [The Wall Street Journal]
After lagging behind longtime rival AstraZeneca in the race to develop a COVID-19 vaccine, UK pharma group GSK is now watching its shares sell to an activist fund that promises a management shakeup. [Bloomberg]
Regulators are struggling to keep up as crypto's rapid move into banking leaves customers and financial markets vulnerable. [The New York Times] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 364 Deals | 1968 People | 516 Companies | 8 Funds | | | | | | |
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| 2015 Vintage European Debt Funds | | | | | | |
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| Senegal's Wave grabs $200M Series A | | | Wave, a provider of mobile money services that's based in the US and Senegal, has reportedly raised a $200 million Series A led by Sequoia Heritage, Founders Fund, Stripe and Ribbit Capital at a valuation of $1.7 billion. Though similar to PayPal, Wave's platform does not require users to have bank accounts, and transactions can be facilitated via local businesses that function as agents. The funding will be used to expand into additional markets such as Uganda, TechCrunch reported. | | | | | | | | | Emulate has raised an $82 million Series E led by Northpond Ventures, with participation from Perceptive Advisors. The Boston-based company offers an in vitro modeling system to help drug researchers replicate and study human biology and disease. Emulate was valued at $278 million in 2019, according to PitchBook data. | | | | | | | | Factorial books $80M Series B | | | Factorial has raised $80 million in a round led by Tiger Global. The Barcelona-based company is the developer of an HR automation platform designed to help employers manage recruitment, onboarding and other administrative operations. Founded in 2016, Factorial counts KFC and Booking.com among its clients. | | | | | | | | Apriori raises $30M Series D | | | Apriori, the developer of a product management platform for manufacturing teams, has raised $30 million at a $280 million valuation in a round co-led by PBJ Capital and Omega Venture Partners. Based in the Boston area, the company was valued at $115 million in 2019, according to PitchBook data. | | | | | | | | | DataChat has raised a $25 million Series A co-led by Redline Capital and Anthos Capital. The Madison, Wis.-based company aims to democratize data science with their no-code, AI-based business intelligence platform. | | | | | |
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| Blackstone strikes $5B deal for Chamberlain | | | Blackstone has agreed to acquire The Chamberlain Group, a provider of smart-access solutions for residential and commercial properties, from The Duchossois Group in a deal that values Chamberlain at around $5 billion. Based in Oak Brook, Ill., Chamberlain's brands include garage door company LiftMaster and Grifco, a provider of commercial door operating systems. | | | | | | | | Silver Lake to take stake in roadside assistance provider RAC | | | Silver Lake has agreed to acquire a stake in European roadside assistance company RAC. The US firm will become a co-shareholder with GIC and CVC Capital Partners. RAC has 13 million members and employs over 4,000 people across the UK. GIC and CVC became shareholders in RAC in 2014 and 2016, respectively. | | | | | | | | Butterfly partners with Chosen Foods | | | Butterfly Equity has agreed to acquire a majority stake in Chosen Foods, a San Diego-based provider of avocado oils, cooking sprays, dressings and more. Based in Los Angeles, Butterfly specializes in backing companies in the food industry. | | | | | | | | KKR, EQT join bidding for Germany's Zooplus | | | Zooplus, a German pet food and supplies retailer, confirmed it has engaged in talks with KKR and EQT about a possible take-private deal, according to reports. The news comes after Hellman & Friedman agreed to acquire the business last month in a deal that valued it at some €3 billion (about $3.6 billion). Zooplus was founded in 1999 and sells its products in 30 European countries. | | | | | |
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| EFM looking to offload Moda Midstream assets in $3B deal | | | EnCap Flatrock Midstream has agreed to sell Moda Midstream's Ingleside Energy Center and other assets to Enbridge, a Canadian crude oil and natural gas company, at an enterprise value of $3 billion. Moda Midstream is a Houston-based liquids terminaling and logistics company. Moda Ingleside Energy Center is the nation's largest crude export terminal by volume, having loaded over 25% of all US Gulf Coast crude exports in 2020. EFM has backed Moda since 2015. | | | | | | | | Vista's Allvue Systems files for public debut | | | Vista Equity Partners-backed Allvue Systems has filed for an IPO on the NYSE. The Florida-based company is a provider of investment management software for fund managers, investors and administrators in the alternative investments sector. Allvue reported a $21 million net loss on $71 million in revenue for the first six months of 2021. The company was formed in 2019 through the merger of Black Mountain and AltaReturn, two investment tech specialists. | | | | | | | | PE-backed Dutch Bros sets price range for IPO | | | TSG-backed coffee shop chain Dutch Bros has set the price range for its upcoming IPO at between $18 and $20 per share. The Oregon-based company, which operates over 470 stores, plans to sell 21.1 million shares. It would raise nearly $401 million at the midpoint of the range. | | | | | | | | PE-backed sports betting company sets IPO terms | | | CPPIB-backed Sportradar, a Swiss provider of sports betting and sports entertainment products and services, will sell 19 million shares of common stock priced between $25 and $28 apiece in its IPO. The company's other investors include TCV, Michael Jordan and Mark Cuban. | | | | | |
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| VW plans $355M+ decarbonization fund | | | Volkswagen intends to launch a €300 million (about $355.14 million) fund to invest in decarbonization projects and startups, CEO Herbert Diess wrote in a LinkedIn post. The German carmaker reportedly also plans to produce only electric vehicles by 2035. Volkswagen has previously invested in electric vehicle battery companies Northvolt and QuantumScape. | | | | | |
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"In H1 2021, the valuations of companies based in the UK & Ireland across all financing stages paced higher than 2020 figures. Most notably, the late-stage median came in at €15.0 million through H1 2021, 45.1% larger than the record €10.4 million in 2020. VC in the region has developed strongly during the last decade, and entrepreneurs, operators, and investors remain confident of the long-term prospects as evidenced by record capital investment and 2021 valuations in the region."
Source: PitchBook's Q2 2021 European VC Valuations Report | | | | | |
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