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In today's Daily Pitch, you'll find: - Our newest analyst note breaks down the imbalance between how much capital startups want and how much VCs are actually offering.
- While Blackstone's real estate funds weighed on its Q4 earnings, its PE portfolio held strong.
- Many European PE players switched jobs in 2022, so we've highlighted some notable moves.
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| A case of chronic dry powder | | There's a hiccup in the private markets that almost no one is talking about: the disconnect between the capital startups are seeking and the money VC firms are actually investing.
Our latest analyst note dives into this imbalance and explores what it means for valuations, deal terms and startups going forward. Key takeaways include: - Capital demand outpaced supply in some cases by over 145% in Q4 2022. Overall, more than twice as much capital was requested than supplied.
- The PitchBook Dealmaking Indicator shows a sharp turn toward a more investor-friendly environment.
- All venture stages are affected, but the late-stage VC market shows the greatest imbalance.
| | | | | | | | | Blackstone's earnings fall, but PE holdings show strength | |  | Blackstone CEO and co-founder Stephen Schwarzman
(Alex Wong/Getty Images) | | | Blackstone reported a significant year-over-year decline in its earnings on Thursday after the asset manager struggled to sell investments in the fourth quarter of 2022.
The depreciation in the firm's two main real estate investments in Q4, coupled with slower realization activity, weighed on its earnings figures.
There is a silver lining to the lackluster quarterly results. The value of the firm's corporate private equity and private credit investments climbed in the last quarter. | | | | | | | | | Attractive equity valuations reassure European investors | |  | | The European Central Bank in Frankfurt, Germany (telesniuk/Shutterstock) | | | Inflation in Europe has ramped up to around 10% due to supply-chain bottlenecks, labor shortages and the war in Ukraine. That has spurred central banks to raise interest rates to 2% in the EU and 3% in the UK.
In a recent report, Morningstar analysts examine the mixed effects on equity markets in the current economic landscape. They investigate the challenges faced by companies focusing on commoditized goods as well as the opportunities for businesses in the travel, homebuilding, and shipping and logistics sectors. | | | | | | | | | Movers and shakers of 2022: Top people moves in European PE | |  | | (Rawpixel.com/Shutterstock) | | | The PitchBook Platform recorded 137 senior departures from European private equity firms in 2022, with many executives either joining a new firm or starting their own.
We gathered highlights of notable industry players who sought out new career opportunities last year. | | | | | | | | | Private debt market braces for stormy seas | |  | | (Drew Sanders/PitchBook News) | | | The private debt market, itself the result of a global financial upheaval, potentially faces its biggest test yet amid 2023's uncertain economic outlook.
After nearly a decade of rapid growth, private debt could be in for a rude awakening as higher interest rates threaten companies' abilities to service their borrowing costs—which in turn will force investors to think twice about their private debt exposure.
Meanwhile, aggressive monetary tightening and the very real prospect of a global recession could also stifle the deal pipeline for alternative lenders, much as it has for private equity firms. Yet, investors are raising large amounts of capital for the strategy. | | | | | | | | | | Can ChatGPT make a market-beating ETF? [Bloomberg]
Why the US' last washboard factory isn't ready to throw in the towel. [The Wall Street Journal]
Are institutional investors actually responsible for the housing crisis? [The Atlantic] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 284 Deals | 778 People | 298 Companies | 18 Funds | | | | | | |
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| 2020 Vintage North American PE Funds | | | | | | |
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| Pearl Health secures $75M | | | | | | | | | | Health insurance startup Angle Health has raised a $58 million Series A led by Portage, Axios reported. The company offers customizable insurance plans for small to medium-sized businesses. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Senken bags $7.5M for CO2 platform | | | | | | |
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| Don't miss our upcoming webinar | | Join PitchBook in examining the EU's new Sustainable Financial Disclosure Regulation, which will require private market investors to disclose ESG performance starting in June 2023. A panel of ESG experts will provide an overview of the requirements and how they will affect investors and portfolio companies. Key topics include: - What is SFDR (SDR-, UK- and their related disclosure requirements), and who will be most affected by its conditions?
- What are the differences between SFDR Articles 6, 8 and 9? What are the implications of nonadherence and avenues of collecting data to become compliant?
- What is the burden on portfolio companies? How long is the process of becoming compliant?
Register now to secure your spot. | | | | | | | |
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| EnCap invests in power developer Linea Energy | | | EnCap Investments has committed funds to Linea Energy with growth capital from its second energy transition fund. Linea plans to develop, build and run utility-scale renewable power and electric storage assets. | | | | | | | Copley Equity Partners takes stake in Triton consultancy | | | | | | |
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| Stripe plots IPO, stock sale | | | Within the next year, Stripe is planning to either go public or allow its employees to sell their shares in a private-market transaction, according to reports. The payments processing startup has hired JP Morgan and Goldman Sachs to assess investor interest. | | | | | |
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| Prime Group wraps up $2.5B self-storage fund | | | Prime Group Holdings has closed its third flagship fund on a hard cap of $2.5 billion. The vehicle focuses on assets in the self-storage sector. | | | | | | | Vision Ridge annex fund closes on $700M | | | Vision Ridge Partners has closed its SAF Annex Fund on $700 million. The fund targets investments in sustainable real assets in the energy, transportation and agriculture sectors. Roughly half of the capital has been deployed. | | | | | |
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| Ohio pension fund increases PE allocation | | | The Ohio Public Employees' Retirement System has increased its targeted investment allocation in alternatives by 6% to 33%, Pensions & Investments reported. The pension fund plans to invest 1% in private credit, up from zero, and 15% in private equity, up from 12%, among other changes. | | | | | |
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"Cross-border M&A between Europe and North America has always been active in both directions, and as recently as 2016, it favored the US as a recipient of net flows. 2022 was a different story. M&A involving North American acquirers of European companies totaled $315.3 billion for the year, or 21.2% of all European M&A value."
Source: PitchBook's 2022 Annual Global M&A Report | | | | | |
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