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In today's Daily Pitch, you'll find: - Negative PE returns could make it impossible for public pension plans to compensate all their retirees.
- ReCode Therapeutics is partnering with AskBio and the Cystic Fibrosis Foundation, in news from JP Morgan's health conference.
- In our recent analyst note, PitchBook lead analyst Hilary Wiek unpacks the impact market.
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| 'Warning signs': PE could impact public pension plans' funding status this year | |  | | (RoseRodionova/Shutterstock) | | | Declining private equity asset values constitute a major threat to public pension plans this year. A reporting lag in private equity return data means that institutional portfolios with allocations to the asset class will reflect 2022's losses in their 2023 numbers.
While most investors believe the losses won't be as acute as those in public equities, pensions—and their beneficiaries—should be concerned about declining funded ratios. Negative PE returns could push the national average funded ratio to below 2007 and 2008 figures, making it impossible for pensions to compensate all of their retirees, according to an Equable Institute report. | | | | | | | | | Improving visibility into impact investing | | Impact funds are closing in on a record year for fundraising, and our improved tagging and tracking of those funds has opened up insights into investor preferences. Real assets, particularly infrastructure, stands out in drawing a larger share of impact capital when compared to funds in the market overall. Different priorities in different geographies also come to light. For example, North America-based funds are the largest backers of efforts focused on air and pollution.
In our recent analyst note, PitchBook lead analyst Hilary Wiek unpacks the impact market, exploring the progression of impact fundraising trends going back to 2007. With tags based on the GIIN's IRIS+ framework, PitchBook clients can also dive deeper into the impact market, helping GPs and LPs to align their social and environmental goals. | | | | | | | |
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| What's in store for M&A in 2023? Twelve experts give their verdicts | | Ansarada's new report, 2023 M&A Outlook: Q&A with the Top Global Dealmakers, turns to the experts for their global dealmaking predictions for the year ahead.
2022 was a challenging year for dealmakers, with global M&A figures falling far short of the heights achieved in 2021.
Persistent inflation, slowing growth, and rising geopolitical tension were already front of mind this time last year. Russia's invasion of Ukraine, the subsequent dislocation of energy prices, and the continuation of strict COVID-19 measures in China have continued to exert macroeconomic challenges.
Despite all this, dealmakers are far from pessimistic.
Read the expert dealmaker viewpoints on 2023 and the tremendous opportunities to explore in the current climate, including further forays into digitalization and ESG.
Download the report here | | | | | | | |
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| ReCode lines up gene therapy partnerships | |  | | (Andrii Yalanskyi/Shutterstock) | | | PitchBook analyst Aaron Degagne reports from JP Morgan's healthcare conference in San Francisco with some gene therapy news: - Startup ReCode Therapeutics has struck new partnerships with Bayer's AskBio and the Cystic Fibrosis Foundation.
- The company aims to deliver a gene editing-based treatment for cystic fibrosis, with initial safety data expected in mid-2024. Gene editing also holds the promise of advanced treatment for AIDS and cancer within the next decade.
- ReCode's $200 million Series B in June 2022 gave it a multiyear cash cushion to weather fragile markets. That round reportedly valued ReCode at $492 million, up from $145 million in 2020.
| | | | | | | | | Insurtech's valuation declines spill over into the early stages | | While insurance giants keep calm and carry on, many recently listed insurtech companies have floundered, indicating that they were overvalued before going public. Now, these corrections are catching up with the private markets, and PitchBook analysts foresee a challenging market ahead for VC-backed insurtech startups.
Our recent Emerging Tech Research highlights the biggest players in insurtech and breaks down the sector's rocky third quarter. The report also spotlights opportunities in geospatial intelligence and specialty insurance for new markets. | | | | | | | | | Startups beware: Juggling board members may drop the ball | |  | | (Caroline Suttie/PitchBook News) | | | When it comes to startups, having a diverse and experienced board of directors can be a key factor to success.
As we head into this new year, the general consensus in the VC world is that funding will be harder to come by and times will be leaner in terms of running a business. Having a strong board with a big name on it is likely to come in handy both in terms of expertise and optics.
But what happens when one of those board members is also a member of a dozen others?
Overboarding, as the practice of accumulating board memberships is known, has been on many minds recently, particularly with publicly listed companies, which are taking a stance against it. According to PwC's 2022 Annual Corporate Directors survey, nearly half of respondents stated that an independent director shouldn't hold more than three board seats.
Loading up on directorships isn't unusual in the venture world. Around 15% of VC investors who have board seats hold more than four, according to PitchBook data. | | | | | | | | | | The Food and Drug Administration is pressing pause on tests of experimental medicines more often, a side effect of interest in promising but less-proven technologies. [The Wall Street Journal]
New England Patriots owner Robert Kraft and star NFL quarterback Tom Brady are among those sharing in the pain of FTX's sudden implosion. [Bloomberg]
Buy now, pay later providers such as Klarna have brought about a rejection of traditional credit in favor of these new-age layaway programs, which are riskier than they may seem. [The Atlantic] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 334 Deals | 1432 People | 462 Companies | 7 Funds | | | | | | |
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| 2020 Vintage North American Debt Funds | | | | | | |
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| Chronosphere soars to $1.6B valuation | | | | | | | | Monogram Health raises $375M | | | | | | | | OpenAI to back Keller and Zeloof's Atomic Semi at $100M valuation | | | Jim Keller and Sam Zeloof are seeking a $100 million valuation for their new startup, Atomic Semi, TechCrunch reported. According to the report, OpenAI, the creator of popular chatbot Chat GPT, has invested $15 million from its startup fund. | | | | | | | Capella Space raises $60M | | | | | | | | Paytient nabs $40.5M in equity and debt | | | | | | | | The Easy Company lands $14.2M | | | | | | |
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| Insights on over 100K clinical trials now available in PitchBook | | In response to market volatility and slowing innovation in the computer hardware and software space, investors are turning to healthcare—specifically, non-cyclical industries like biotech and pharma—as the next wave of high-impact, high-return opportunities. However, biotech and pharma investing contain a different set of risk profiles compared to tech startups. Progress through clinical trial stages is the best indication of the ultimate commercial viability of a new drug or medical device—and therefore, the likelihood of achieving a solid investment return.
To help investors isolate biotech and pharma companies with the highest chance of success, we've launched a new clinical trial integration, providing insights on over 100,000 clinical trials alongside our industry-leading funding data. With this new tool, investors can reduce time spent on opportunity discovery and due diligence by viewing a company's funding status alongside its drug development pipeline.
Explore our new clinical trial integration. | | | | | | | |
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| Mubadala invests in Resilience | | | Mubadala has invested in biopharmaceutical manufacturer Resilience. The Abu Dhabi-based sovereign investor also agreed to build a new manufacturing facility in the United Arab Emirates that Resilience will operate. | | | | | | | OTPP's GPA Global acquires luxury packaging company | | | | | | | | | | Crux Capital and Trive Capital have purchased a minority stake in HTeaO, an iced tea franchisor. The company and both PE firms are based in the Dallas-Fort Worth metro area. | | | | | |
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| Khosla plans to raise $3B | | | Khosla Ventures is aiming to raise roughly $3 billion across three funds, Axios reported. The firm plans to raise $1.5 billion for its eighth flagship fund, $1 billion for a second opportunities fund and $400 million for seed investing. The firm has invested in companies including DoorDash, Instacart and Affirm. | | | | | | | Goldman Sachs raises over $1.6B for first climate fund | | | Goldman Sachs Asset Management has held the final close of its first climate-focused fund, Horizon Environment & Climate Solutions I, on more than $1.6 billion. The fund, which has deployed nearly $1 billion to date, targets global growth capital investments. | | | | | |
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| Dextra Partners launches with $2.5B to invest | | | A New York-based firm called Dextra Partners has emerged with plans to invest $2.5 billion, committed across several vehicles, primarily through middle-market PE deals. The new firm's top founding executives were formerly long-tenured employees at GoldPoint Partners. | | | | | |
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