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In today's Daily Pitch, you'll find: - Some investors indicate that solid succession plans are a key factor when considering GP stakes in PE firms.
- Middle-market dealmaking stayed steady in H1, but fundraising was another story, according to our new US PE Middle Market Report.
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| Succession plans emerge as a key part of GP stakes investing | |  | | (Andrey_Popov/Shutterstock) | | | Behind the scenes of the recent wave of investment in GP stakes in PE firms, some partners bringing in new capital have another crucial concern in mind: succession planning.
In addition to fund expansion and growth initiatives, PE firms often seek minority capital to facilitate succession planning. At the same time, some investors mulling a stake in a firm want to see a solid succession plan in place before making a commitment. | | | | | | | | | Dealmaking holds steady, fundraising slows in US PE middle market | | PE deal activity in the US middle market totaled $228.2 billion in H1—a sharp drop from 2021's record but on pace for a healthy year nonetheless. Firms have abundant dry powder, and large GPs averse to making massive bets in the current environment have eagerly turned their eyes to smaller investment opportunities.
Yet the middle market's size advantage in the dealmaking space proves a hindrance when it comes to fundraising, according to our Q2 2022 US PE Middle Market Report, sponsored by Antares Capital and Baker Tilly. Among the takeaways: - The crowded fundraising landscape is expected to have its biggest negative effect on the middle market, as LPs pushed near their allocation limits prioritize relationships with larger, more-established fund managers.
- Add-on activity accounted for 73% and 62.5% of deal count and value, respectively—both all-time highs.
- Deal sizes have trended downward, with middle-market deals over $500 million making up their lowest share of count and value in at least a decade.
- Exit activity in Q2 fell for the second consecutive quarter, with the cumulative value of $35.6 billion falling below the average quarterly value for the five years pre-pandemic.
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| A message from West Monroe | | |
| How to protect your portfolio companies against cyber attacks | | Companies acquired by private equity firms are quickly thrown into the spotlight and become an increased target for cybersecurity attacks given their public exposure, deep financial resources, and low cybersecurity maturity.
There are an abundance of cybersecurity attack types to prevent against, and knowing where to focus your portfolio company's time, resources, and investments can be challenging.
A good rule of thumb? Companies should focus their efforts on cybersecurity controls that would help prevent against today's most prevalent attack types: ransomware, data breaches, impersonation attacks, and business email compromises.
Read more to learn what actions you should take to protect your portfolios against a cyber-attack.
Read More Here | | | | | | | |
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| Blackstone's Bourne Leisure to exit holiday group Butlin's | |  | | (Sarnia/Shutterstock) | | | Blackstone has agreed to sell UK resort group Butlin's back to its original owners less than two years after buying parent company Bourne Leisure.
The deal, which is reported to be worth £300 million (about $341 million), adds to another £300 million generated by the sale of some of Butlin's real estate assets in July. | | | | | | | | | Saudi Arabia's efforts to draw startup investment are paying off | |  | | Riyadh (Bayan Alkurbi/Getty Images) | | | Venture-backed startups in Saudi Arabia have been bolstered by a confluence of favorable trends in recent years—including low interest rates, increasing urbanization, demand for online groceries, pro-business reforms and a sharp rise in oil revenues.
The momentum has catapulted VC deal value in the region, reaching more than $425 million so far this year, on pace to surpass the record levels of 2021, according to PitchBook data. | | | | | | | | | | Calpers, the biggest public pension plan in the US, says putting its PE program on hold for 10 years cost it up to $18 billion in returns. [Financial Times]
Having a good climate plan, and following through on it, could help tech companies attract top talent. [Protocol]
Some PE firms are disputing the findings of a new report grading them on their oil and gas holdings, highlighting the lack of readily available information on a huge industry. [Institutional Investor] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 412 Deals | 1974 People | 493 Companies | 27 Funds | | | | | | |
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| 2015 Vintage North American VC Funds | | | | | | |
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| A message from Apex Group | | |
| Fund managers benefit from $3.8M savings with Apex Group | | Forrester Consulting has recently released its independent study, having interviewed key decision makers across a number of large Apex Group clients, and the findings in its Total Economic Impact™ study of Apex Group are compelling: - Around $5.4M in cost benefits
- $2.75M Net Present Value over three years
- 105% return on investment ROI
To find out more about the benefits and savings that Apex Group's single-source solution can provide, download Forrester's Total Economic Impact™ report on Apex Group here.
Apex Group's transformation over the past few years has been driven by the Group's founding vision—to deliver service in a better way, in a way that no one else can. | | | | | | | |
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| Opto Investments emerges from stealth with $145M | | | | | | | | | | | | | | | Fraud prevention startup Sardine raises $51.5M | | | Sardine has raised a $51.5 million Series B led by Andreessen Horowitz. Based in the Bay Area, the company provides fraud prevention products to fintech and Web3 companies. | | | | | | | Classiq extends Series B to $49M | | | Awz Ventures has led a $13 million Series B extension for Classiq, bringing the round's total to $49 million. Based in Tel Aviv, the company is developing quantum computing software for commercial applications. | | | | | | | Scratch Financial banks $35M | | | | | | | | 4M Analytics brings in $30M | | | | | | | | ImmunoScape collects $14M | | | ImmunoScape has raised $14 million in a round led by Anzu Partners. The company is the developer of a drug discovery platform for the treatment of solid tumors. | | | | | | | Battery Ventures leads $14M round for Higlobe | | | Higlobe, the developer of a payments platform designed to facilitate cross-border transfers, has raised $14 million in a round led by Battery Ventures. Founded in 2020, the Palo Alto-based company is backed by investors including FJ Labs and TTV Capital. | | | | | |
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| KKR to invest $450M in Hero Future Energies | | | KKR has agreed to invest $450 million in Hero Future Energies, the renewable energy arm of the Hero Group. The energy producer holds a presence in India, Bangladesh, Vietnam, Singapore, Ukraine and the UK. | | | | | | | BCI takes stake in Authority Brands | | | | | | | | Littlejohn & Co. backs The Hiller Companies | | | | | | | | MiddleGround picks up HLC | | | MiddleGround Capital has acquired HLC, a distributor of bicycle parts and accessories. HLC is headquartered in South Carolina and Quebec. | | | | | | | Eir Partners lands Helpware | | | Eir Partners has acquired Helpware, a provider of customer experience outsourcing solutions for sectors including healthcare, fintech, ecommerce and gaming. | | | | | | | CORE-backed Cadrex acquires IDL | | | | | | |
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| Clearlake collects $2.5B+ for opportunities fund | | | Clearlake Capital Group has raised more than $2.5 billion for its third opportunities fund. The vehicle will target companies in the consumer, industrial and technology sectors. | | | | | | | Union Capital Associates closes third fund on $309M | | | Union Capital Associates has closed its third fund on $309 million, according to reports. The fund will invest in US-based founder-owned companies. | | | | | | | Lerer Hippeau raises $230M across two funds | | | Lerer Hippeau has raised a total of $230 million for its eighth pre-seed and seed fund and its fourth select fund, which invests in companies from Series A to C. | | | | | | | Avanta Ventures collects $225M | | | Avanta Ventures has raised a $225 million early-stage fund. The Mountain View, Calif.-based firm seeks to invest in sectors including fintech, cybersecurity, smart home and applied AI. | | | | | |
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| Chamath Palihapitiya scraps two SPACs | | | | | | |
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