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| In today's Daily Pitch, you'll find: | | | | | |
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| Succession planning at PE firms reveals risks of leadership change | |  | | (Sarah Schwab/PitchBook News) | | | As the private equity industry comes of age, fund managers are ushering in a new generation of leaders. But the issue of succession goes far beyond just finding the right people to take over the reins.
Many firms are recognizing the value of modernizing their approach to human resources and harnessing culture as a means to better prepare for leadership change—planned or otherwise. | | | | | | | | | A cloudy end to VC's day in the sun | | Financial markets have sustained a series of gut punches over the last two quarters. With falling growth stocks, a recent wave of layoffs and central banks scrambling to tame inflation, the tailwinds benefiting venture capital funds over the prior two years appear to have reversed.
As a consequence, fears of recession and anecdotes of dealmaking troubles have VC fund LPs wondering what will come of their outsize paper returns.
Our recent analyst note takes an early look at 2022 VC fund performance and the impact of growing pessimism on private market portfolios. Key takeaways include: - Preliminary data for Q1 suggests markdowns in net asset values have started occurring, with 68.1% of reporting VC funds showing a drop in valuations from their 2021 peaks. That puts VC funds in worse shape than other private fund strategies.
- With over $1.4 trillion in unrealized value sitting in VC funds, a sizable and sustained drop in valuation multiples could result in billions of dollars in value wiped away from LP portfolios.
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| A message from RBC Capital Markets | | |
| How is the rise of private equity mega-funds influencing the M&A market? | | Private equity's push for scale continues, and funds worth $35 billion are now a reality. With increased fund sizes, private equity firms are broadening the range of target deals. According to RBC's Co-Head of Financial Sponsors, Harold Varah, "While only so many firms can do mega-deals, there will be a material increase in deals worth more than $10 billion going forward."
How are large PE funds navigating market volatility? Where can PE find a competitive edge? Which sectors will PE funds target for M&A transactions?
Find out more, here. | | | | | | | |
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| Global supply chain weakness draws increasing PE investment | |  | | (shaunl/Getty Images) | | | Private equity firms are flocking to back supply chain tech as disruptions in the sector present opportunities for investments.
"The pandemic-related supply chain challenges we have all experienced over recent years [have], I think, created a new level of appreciation for the importance of the sector as part of our general economy," said Nick Antoine, co-founder and managing partner of Red Arts Capital, a supply chain-focused PE firm. | | | | | | | | | | Private lenders are now handing out cheaper debt than Wall Street banks. [Bloomberg]
Crypto lender Celsius Network was promoted as less risky than a bank with better returns for customers, but what was the truth behind the sales pitch? [The Wall Street Journal]
Why Nuveen's new CIO is anticipating a period of normalization, rather than a massive recession. [Institutional Investor] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 425 Deals | 1904 People | 576 Companies | 32 Funds | | | | | | |
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| 2019 Vintage Global VC Funds | | | | | | |
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| ReCode Therapeutics raises $120M | | | ReCode Therapeutics has added $120 million to its Series B, bringing the round's total to $200 million. The extension was co-led by Leaps by Bayer and AyurMaya. The startup is developing gene correction therapeutics that target central nervous system, lung, liver and oncology indications. | | | | | | | | | Arzooo has raised $70 million in a round co-led by SBI Investment and Trifecta Leaders Fund, TechCrunch reported. Based in Bengaluru, the company partners with brands to secure and deliver products to retail stores across 22 states in India. | | | | | | | Tomorrow Health nabs $60M Series B | | | | | | | | Visby Medical adds $35M to Series E | | | Visby Medical has raised $35 million in a Series E extension led by Lightrock, bringing the round's total to over $135 million. Based in San Jose, the company is a provider of medical equipment designed to diagnose and treat infectious diseases. | | | | | | | Nautical Commerce swims off with $30M | | | Nautical Commerce has raised $30 million in a Series A led by Drive Capital. The company's platform helps brands, retailers, B2B companies and startups launch and scale online marketplaces. | | | | | |
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| GIP, ADIA to take control of European rail logistics company | | | | | | | | FloWorks picks up NetMercury | | | | | | | | FFL Partners backs IT specialist | | | | | | | | Bain Capital Credit, Pacific Lake lead investment in Darcy Partners | | | Bain Capital Credit and Pacific Lake Partners have led a growth investment in Darcy Partners, a provider of technology-focused market intelligence to the energy sector. Darcy Partners serves clients across the oil, gas, power, energy transition and sustainability sectors. | | | | | | | Teleo Capital-backed Univeris lands TechRules | | | Univeris, a Canadian provider of enterprise wealth management solutions, has acquired TechRules, a Madrid-based provider of wealth management software and services to financial entities. Univeris is backed by Teleo Capital Management, a lower-middle-market PE firm. | | | | | | | Great Range Capital partners with Repairs Unlimited | | | Great Range Capital has partnered with Repairs Unlimited, a manager of fire and water restoration and reconstruction services. Founded in 1986, Repairs Unlimited provides restoration services to insurance adjusters, home owners and government and commercial customers. | | | | | |
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| Reciprocal Ventures grabs $68.5M for Fund II | | | Reciprocal Ventures has closed its second fund with $68.5 million in capital commitments. The New York-based firm makes early-stage investments in Web3-related companies. | | | | | |
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