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In today's Daily Pitch, you'll find: - PitchBook analysts share their predictions for European PE and VC in 2023.
- Out latest Quantitative Perspectives report highlights how the uncertainties and trends of PE in 2022 might impact next year.
- Chart of the day: PE-led take-private deal activity, from our US PE Middle Market Report.
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| Optimism for European private capital despite a challenging year ahead | | European private capital faced a myriad of challenges in 2022, with a mix of economic factors impacting the market coupled with a European war—yet analysts are optimistic about certain areas for next year.
Our 2023 European Private Capital Outlook examines how a harsher economic environment can aid parts of the market, while remaining a detriment to others. For instance, listed companies become cheaper acquisition targets as their valuations drop, but interest rate hikes make financing leveraged PE deals more expensive. | | | | | | | | | Looking ahead at PE landscape with quantitative data from 2022 | |  | | (Kwangmoozaa/Shutterstock) | | | This year has been a mixed bag for the US private equity market. And as the new year dawns, challenges lie ahead, including the prospect of higher interest rates, tightening financial conditions and further economic slowdown—or even recession.
PitchBook's latest Quantitative Perspectives report highlights how these uncertainties might impact the PE landscape next year. We've identified and explored four key takeaways from the report. | | | | | | | | | Clean energy VC investment shines in a storm | | The energy crisis that followed Russia's invasion of Ukraine has accelerated demand for alternative energy sources, especially low-carbon ones that can be produced domestically at lower cost than imported fuels.
Meanwhile, growing investment in clean energy supply chains and hefty government spending measures provide a foundation for future growth.
It all adds up to a fertile environment for startups in the space, as PitchBook senior analyst John MacDonagh lays out in our recently launched Emerging Tech Research coverage of clean energy. - VC activity has been remarkably resilient, with $11 billion raised across 401 deals in the segment. That's on pace to match the record set in 2021.
- Intermittent renewable energy, especially solar, has outperformed relative to last year. So have clean fuels, led by low-carbon hydrogen.
- The Inflation Reduction Act, signed into law by President Biden in August, gives significant support to clean energy production. Its effects are already being felt.
| | | | | | | | | General Atlantic's $3.5B haul caps another strong year for climate funds | |  | | (Fly_and_Dive/Shutterstock) | | | General Atlantic's $3.5 billion debut climate-focused fund shows that the sector is still a priority with LPs.
Private equity and venture capital firms are responding to scientists' dire warnings about the future of the planet by raising vehicles aimed at funding companies that reduce carbon emissions and provide clean technology. TPG, Fifth Wall and Union Square Ventures are among the other private investors to close climate-oriented funds this year. | | | | | | | | | European VC-backed IPOs falter | |  | | (Immersion Imagery/Shutterstock) | | | VC-backed IPO activity in Europe has significantly declined since last year's record high.
One deterrent for new listings has been the performance of those that went public in the last few years; the majority that have floated since 2021 are now trading below their listing price. | | | | | | | | | Nuclear fusion need not apply: Planet-saving tech is ready to scale | |  | | (Joey Schaffer/PitchBook News) | | | Earlier this month, scientists shot a cluster of lasers at hydrogen isotopes and—for the briefest of moments—got an inkling of what it would be like to control a star.
The experiment at the Lawrence Livermore National Laboratory in California marked the first time that a fusion reaction spun off more energy than was used to create it. It's an important milestone, but commercial fusion is likely still decades off, even if things go well. But the climate is not waiting, and dozens of other clean energy technologies are ready for prime time.
Venture investors say the primary challenge for climate-tech startups is no longer tech breakthroughs. It's time to scale. But how do they do it? New business models, big-name partnerships and gigatons of software. | | | | | | | | | | One block in Baltimore is illustrative of how big US banks are falling short of their promises to create more Black homeowners. [Bloomberg]
Research shows that many large corporate spinoffs don't create much value. Here's what the top performers are doing right. [Harvard Business Review]
One writer's thoughts on why the due diligence process needs an overhaul. [Institutional Investor] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 396 Deals | 1894 People | 585 Companies | 41 Funds | | | | | | |
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| 2018 Vintage Global Debt Funds | | | | | | |
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| | | | | | | | | | Vehicle manufacturing startup Divergent has received a $100 million investment from Hexagon, a Swedish software developer for industrial applications. The company focuses on environmentally sustainable manufacturing. | | | | | | | Xscape Photonics gets $10M | | | Xscape Photonics, a startup that specializes in using lasers and mirrors to transmit data inside a computer, has raised $10 million from Altair, a software provider for AI, cloud and data centers. | | | | | | | Parallel Bio rakes in $4.3M | | | | | | |
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| KKR to acquire Bushu Pharma | | | KKR has agreed to acquire Bushu Pharmaceuticals from BPEA EQT using one of its Asia-focused funds. Bushu Pharmaceuticals, a Japanese contract drug manufacturer, was first acquired by BPEA EQT in 2014 for roughly $650 million. | | | | | | | Royal Caribbean strikes deal with infrastructure fund | | | Royal Caribbean Cruises and iCON Infrastructure have agreed to form a partnership that will develop, own and manage cruise terminals in multiple ports. The cruise line will contribute 10% while the infrastructure investor will own 90% of the partnership, which will work on projects in Miami, Spain, Italy and the US Virgin Islands. | | | | | | | Lorient, Martis back Rise Health with growth equity | | | | | | |
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| PE firms agree to sell part of Terreal to strategic buyer | | | | | | |
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| AINDA sets sights on $600M for next fund | | | Mexico City-based PE firm AINDA has been raising capital and expects to have $600 million in commitments to its latest fund sometime in early 2023, Reuters reported. The firm plans to invest in Colombian and Mexican infrastructure projects, CEO Manuel Rodriguez told Reuters. | | | | | | | 10D closes $245M across two funds | | | Israel-based venture capital firm 10D has closed two new funds. The firm's $185 million Fund II will target seed and Series A startups, while its $60 million opportunity fund will be used for continued investments in its portfolio. | | | | | | | The 81 Collection wraps up $41M | | | Chicago-based The 81 Collection has closed its inaugural vehicle on $41 million. The fund will be used to invest in early-stage startups in sectors including manufacturing, construction and forestry. | | | | | |
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