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In today's Daily Pitch, you'll find: - Public PE firms broke records across the board in 2021 as investors continue to reward light balance sheets and high payouts.
- After having its resilience tested as never before during two years of pandemic-related disruptions, the private debt market is poised for growth.
- US VCs are backing European startups at a record pace, joining €70 billion worth of rounds in 2021.
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| US PE firms break records across the board | |  | | (Atlas Studio/Getty Images) | | | The five big public PE firms—Blackstone, Apollo Global Management, Ares Management, The Carlyle Group and KKR—had a lucrative 2021. Overall, investors broke records in metrics including assets under management, fundraising, total profits and more.
Our latest analyst note breaks down the data behind US PE firms' earnings in Q4 2021. Takeaways include: - Healthy fund performance bodes well for future growth as a flurry of flagship offerings hits the market. Additionally, billions in net accrued-performance revenues may be realized as firms exit profitable investments.
- Valuations for publicly traded managers diverged in 2021, with public investors rewarding high-payout, balance-sheet-light approaches.
- In 2021, public investors cemented the move away from evenly distributing their management fees and carried interest to shareholders, favoring the steady flow of fees over the less consistent payout of carry. TPG and KKR restructured their payouts; other firms are expected to follow suit.
| | | | | | | | | | Private debt poised for further growth after resilience during pandemic | |  | | (NiseriN/Getty Images) | | | After seeing its resilience tested as never before during two years of pandemic-related disruptions, the private debt market is poised for growth as yield-hungry institutional investors extend their hunt for high-performing assets.
Public health emergency lockdowns in 2020 dealt a series of hammer blows to borrowers, pushing default rates higher and creating new debt repayment challenges to both private and public companies. Central bank stimulus programs limited the damage, and helped private debt withstand the effects of the economic downturn.
The rise of private debt is being driven by investors' search for higher returns in a prolonged period of low interest rates and recent stock market volatility. Industry participants said they see no sign that enthusiasm for the asset class will wane this year. | | | | | | | | | | US investors pile into European rounds at record pace | |  | | (wenjin chen/Getty Images) | | | Investment in European and Israeli startups crossed the €100 billion mark in 2021 for the first time. Among the most significant drivers of that record was the increased presence of US VCs.
Investors from across the pond took part in deals worth over €70 billion in total—a figure that dwarfs the previous record. And the flood of US capital into European startups is only expected to accelerate. | | | | | | | | | | KKR makes new bet on growth in natural gas market | |  | | (ImagineGolf/Getty Images) | | | Private equity giant KKR and Pembina Pipeline have agreed to merge their western Canadian natural gas processing assets in a C$11.4 billion ($8.9 billion) deal that will create a natural gas processing heavyweight and aims to take advantage of rising prices for the commodity.
The transaction illustrates KKR's continued interest in the oil and gas industry, while many other large investors have been shifting away from traditional energy in recent years. | | | | | | | | | | Charting Tiger Global's staggering dealmaking pace | |  | | (A. Martin UW Photography/Getty Images) | | | Early-stage investments were a big part of Tiger Global's dizzying trajectory in 2021. The VC behemoth participated in 116 early-stage venture deals globally last year and shows no signs of slowing down in 2022.
Here's a closer look at the firm's dealmaking trends in recent years. | | | | | | | | | | Rising inflation is driving up expenses for many large US pension funds that have promised retirees cost-of-living raises. [The Wall Street Journal]
Despite working in high-paying jobs at Silicon Valley companies, some employees are unable to escape the shadow of India's caste system. [Wired]
Military conflicts have not been a major factor in market movements for decades; now global relations are back on investors' minds. [The New York Times] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 184 Deals | 681 People | 186 Companies | 17 Funds | | | | | | |
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| 2015 Vintage Global PE Funds | | | | | | |
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| Veev brings home $400M Series D | | | Veev has raised $400 million in a round led by Bond, with support from investors including LenX and Zeev Ventures. Based in California, the company aims to improve the speed and quality of homebuilding. | | | | | | | | | Anrok, a developer of a sales-tax platform for SaaS businesses, has raised $20 million in a round co-led by Index Ventures and Sequoia. The company was valued at $34.3 million in June, according to PitchBook data. | | | | | | | | Summit Nanotech raises $14M | | | | | | |
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| Warburg Pincus backs Israel's MDClone | | | Warburg Pincus has co-led a $63 million Series C investment in healthcare-data startup MDClone, alongside Viola Growth. Existing investors AMoon, Lightspeed and OrbiMed also participated. Founded in 2016, MDClone partners with the Department of Veterans Affairs, National Institutes of Health and Israeli hospitals and healthcare providers. | | | | | | | | OpenGate invests in Annex Cloud | | | OpenGate Capital has invested in Annex Cloud, a provider of SaaS customer retention and loyalty management solutions to mid-market enterprise businesses. | | | | | | | | | GTCR has acquired a majority stake in Experity, a Chicago-based provider of software solutions to the urgent care industry. Previous majority investor Warburg Pincus will retain a minority ownership stake. | | | | | | | | TSCP's Len the Plumber acquires Canady's Heating, Air, Plumbing | | | | | | |
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| KPS weighs Howden options | | | KPS Capital Partners is weighing options for Scottish engineering firm Howden Group, Bloomberg reported. The firm is considering a potential sale or initial public offering for Howden at a valuation of as much as $3.5 billion. | | | | | |
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| Accel-KKR closes $1.3B+ growth fund | | | Accel-KKR has raised $1.35 billion for its fourth growth capital fund. The firm closed its third such vehicle on $685 million in 2019. | | | | | | | | Serena Ventures launches $111M fund | | | | | | |
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