Who's No. 1? Our 2021 Annual Global League Tables just went live! Click here to check out the updated rankings of top PE & VC investors, service providers, and acquirers across geography, sector, and more.
Last call! Our insurtech webinar Wednesday will dive into what a rough stretch in the public market means for startups, plus other industry topics. Sign up here. | | | | | |
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| Public PE giants are not only growing but changing how they distribute profits | | The largest alternatives asset managers had a phenomenal 2021, with most posting record inflows, deployment, fee revenue, AUM, stock prices and more. These managers continue to grow market share as they launch new strategies, deepen existing LP relationships, and look to tackle the retail wealth market. Perhaps less discussed has been the changes many firms have made to how they distribute profits and think about their balance sheet. Management fees are highly valued by public market investors because of their recurring nature, while the infrequent nature of carried interest is seen as less attractive.  | | AUM has skyrocketed for many of PE's largest managers. | EQT set the standard for managers going public, by choosing to distribute upwards of two-thirds of management fees while keeping most carried interest to compensate employees—rather than a 50-50 split that many firms utilize. TPG and Blue Owl underwent similar restructurings before going public. Other public managers are taking note. KKR made changes to how it distributes profits, keeping more carry in-house and distributing up to 75% of its management fees to shareholders. Apollo announced a comparable structure, and indications suggest Blackstone could follow suit. Public investors also prefer simplicity. Brookfield's convoluted share structure has long confounded public investors and the firm indicated it could streamline its ownership structure by spinning out the asset manager into a pure-play offering. This would have the added benefit of separating the manager from the massive balance sheet, which public investors have not valued as highly. Brookfield's move may force other public PE firms to adjust their approach. Heading into 2022, many questions remain around whether higher payout ratios and lighter balance sheets will force all public firms to employ similar strategies. To gain a deeper understanding of these trends and more, please download our free analysis of Q4 2021 public PE earnings. As always, please reach out with any questions or comments. | | | | | | | | | | What's ours is yours: A new monthly resource for keeping up with the markets | | We are pleased to announce the launch of our newly created Global Markets Snapshot report, a monthly digest for the goings-on around financial markets. Originally an internal document for our research analyst teams, the Snapshot breaks down a month of trends in the equity, debt, and commodities markets, tracking returns across a range of indexes and sectors.  | | Unicorns. Public returns. Bond yields. Our Snapshot has it all. | It also includes private markets activity, including major deals, PE- and VC-backed listings, and unicorn creation by region. A few highlights from the inaugural edition: - 2022 is off to a rocky start with the S&P 500 falling -8% YTD.
- Energy has been the best performing sector over the last year and in 2022 (+27.3% YTD).
- PitchBook's US VC-Backed IPO index continued its decline, -39% YoY.
- TIPS-implied real yields in the US have crept up but are still firmly negative (-0.79%).
- Commodity prices continue to rise with Brent crude oil up +29.8% YTD.
Click to download our Global Markets Snapshot for February 2022.
We will periodically add more datasets, so be on the lookout for new editions at the beginning of each month.
Any feedback or suggestions are highly welcome.
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The Growing Prominence of US PE Mega-Deals and Exits
2021 was the biggest year ever for US PE mega-deals and mega-exits—transactions of $1 billion or more—setting records in both count and value.
In fact, mega-deals accounted for 32% of all US PE deal value as GPs were fortified by low interest rates, an excess of dry powder, and the growing crowd of mega-funds.
Public listings dominated mega-exits, with a record 75 PE-backed companies debuting at valuations at or above $1 billion.
But how will looming interest rate hikes and regulatory scrutiny impact this activity going forward? | | | | | |
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AI & MACHINE LEARNING: The maturation of data science infrastructure is driving record VC funding for AI startups.
And our analysts estimate the total AI & ML market size grew to over $145 billion last year, boosted by the vertical applications segments as well as semiconductors and autonomous machines.
Our 2021 Annual AI & Machine Learning Report provides a comprehensive overview of VC ecosystem trends across industry segments, updated market size estimates and market maps, and an analysis of key emerging opportunities.
The full report for clients includes the following and much more: - 6,415 segmented public and private companies
- The most active investors in the space
- Exits data and a strategic buyers list
| | | | | | SUPPLY CHAIN TECH—Despite declining deal count, supply chain startups raised a record $10.9 billion of VC investment in Q4.
Indeed, investor interest exploded as the pandemic continued to snarl the global supply chain.
Our research focuses on startups working to automate logistics and bring more consistency to this space.
Some opportunities we're tracking—warehousing, inventory management, and last-mile delivery: | | | | | |
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A couple of events to add to your calendar: - March 14—Senior VC analyst Kyle Stanford will join a Baker Botts-led panel at SXSW for a discussion on today's emerging technologies and the current investment landscape. More details.
March 16—We're hosting a free webinar in partnership with J.P. Morgan that will explore the rise of female founders and investors, the importance of boardroom diversity, and other related topics. Register here. | | | | | |
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AI & machine learning analyst Brendan Burke weighs in on Snowflake's agreement to acquire Streamlit at a reported price of $800 million:
"This acquisition breaks ground for AI & ML model development tools, as we have not tracked such a significant VC exit in the category.
"Streamlit built an open-source library of Python scripts for ML-based applications and had high expectations since its Series A at a $70 million pre-money valuation.
"The founders identified a need for non-specialist developers and data scientists to use familiar programming languages to quickly spin up internal ML tools within a matter of days instead of weeks or months.
"Its library developed a large open-source community from an early stage, including enterprise users at Google and Uber.
"The rapid growth of Snowflake and Databricks is contributing to an unbundling of hyperscaler ML platforms into more user-friendly point solutions along the ML lifecycle.
"These emerging cloud database leaders are increasingly investing in startups to expand their marketplace ecosystems."
| | Brendan Burke
Senior Emerging Technology Analyst
AI & Machine Learning | | | | | |
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Our insights and data featured in the press: - Canadian PE deal flow with US involvement more than doubled over the past five years to $33.8 billion in 2021. [BNN Bloomberg]
- VC funding for crypto projects exploded to top $31 billion last year, more than the 10 previous years combined. [City A.M.]
- "Miami showed the strongest growth of any US market in 2021 compared to a year earlier." [FD Nieuws]
If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team. | | | | | |
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Highlights from our other recent research:
Market updates Thematic research Emerging Technology Research Coming next week (subject to change) - Quantitative Perspectives: US Venture Capital
- 2021 Real Estate Report
- Nordic Private Capital Breakdown (sneak peek)
- ETR: Retail Healthtech
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| | Since yesterday, the PitchBook Platform added: | | 427 Deals | 1712 People | 532 Companies | 28 Funds | | | | | | |
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