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| In today's Daily Pitch, you'll find: | | | | | |
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| US PE picks up the pace of exits | | With four big M&A sales and IPO listings to close out the quarter, US private equity recorded its first big bounce in exits in more than a year. Our Q2 2023 US PE Breakdown, sponsored by Stout, West Monroe and Twin Brook Capital Partners, details how PE firms kept busy buying and selling despite a tough lending environment. - Exit value surged by 66.9% quarter-over-quarter, a high point since crashing six quarters ago and a much-needed boost as funds run out of time to wind down holdings.
- Debt for LBOs has dropped off noticeably in 2023. The average loan-to-value ratio has fallen to 43% this year, down from the five-year average of 52%.
- Among other deal types, take-privates got smaller this year. More than half of announced deals have clocked in under $1 billion.
| | | | | | | | | Private capital holds a key to enabling value-based healthcare | | As parts of the US healthcare industry transition to value-based care, patients should expect better medicine and, hopefully, lower costs. But executing that transition well requires a massive up-front investment.
One solution: Value-based care enablement, a business model that groups independent practices or health systems together and takes on the downside risk of the new billing framework. Our latest industry research delves into the public and VC- and PE-backed companies driving the shift toward better-value healthcare. | | | | | | | |
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| A message from West Monroe | | |
| Special report: Preparing for the next wave of cleantech investment | | West Monroe's annual survey of over 200 private equity executives and corporate development executives—released today—revealed the following: - 75% of investors say recent developments in public policy and regulations around energy have amplified their appetite for M&A in the sector.
- 51% of respondents describe the target of their most recent cleantech transaction as a carveout from a larger organization.
- 33% of respondents rank the scale of ESG-related funds ready for deployment as the most important driver of increased investment in clean energy.
Get the report | | | | | | | |
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| Q&A: Moonfare CEO on unlocking private markets for retail investors | |  | | Steffen Pauls (Courtesy of Moonfare) | | | Companies that open up the private markets to a broader class of investors have proliferated in recent years. At the same time, private market managers are keen to tap new sources of capital.
We spoke to Steffen Pauls, the founder and CEO of one such company, Moonfare, about how the industry is expanding beyond traditional institutional investors. | | | | | | | | | UK plans to unlock $97B of pension funds for private capital | |  | | Jeremy Hunt (Matthew Horwood/Getty Images) | | | UK finance minister Jeremy Hunt plans to direct £75 billion (about $97 billion) of pension fund investments to the private markets.
So far, nine of the UK's largest defined contribution pension schemes have agreed to invest up to 5% of their default funds in unlisted equities by 2030. | | | | | | | | | Emerging managers' struggles and the future of smaller VC ecosystems | | Emerging US VC managers have only secured $2.3 billion so far this year, putting them on track to close less than $20 billion in annual commitments for the first time since 2016.
Limited track records and returns have given LPs pause amid a volatile market, but will there be long-term implications for the venture market if these newer managers continue to be passed over?
Our recent analyst note breaks down emerging managers' historic performance, the factors making fundraising more difficult and the larger ramifications for the venture market as younger managers struggle to secure investor dollars. | | | | | | | | | Herd mentality alive and well as VCs chase AI craze | |  | | (Mara Potter/PitchBook News) | | | AI startups have seemingly defied the overall decline in VC funding of the past 18 months, collectively raising $15.5 billion this year, according to PitchBook data.
Even when you exclude OpenAI's $10 billion round, the sector's VC funding in 2023 has surpassed last year's total and is well over halfway to 2021's peak of $9.1 billion. On top of that, deal pace has remained steady and median post-money valuation is up 109.8% from last year.
While one could argue the scale of AI opportunity justifies the hype, this recent investment activity suggests that a sort of herd mentality has taken hold. | | | | | | | | | | General Mills is paying an agriculture tech startup to help make Cheerios greener. [CNBC]
Many millennial and Gen Z workers have turned away from careers in fossil fuels—making these young CEOs stand out. [Texas Monthly]
As the threat of antibiotic resistance increases, AI could widen the pipeline for new antibiotics. [Scientific American] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 491 Deals | 2127 People | 855 Companies | 32 Funds | | | | | | |
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The Daily Benchmark:
2018 Vintage Global Funds-of-Funds | | | | | | |
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Septerna has raised a $150 million Series B led by RA Capital Management for its small-molecule medicines.
Canada's CarbonCure has received more than $80 million in funding led by Blue Earth Capital to expand its carbon removal technologies for the concrete industry.
New Zealand-based forensic traceability startup Oritain has secured a $57 million Series C led by Highland Europe.
Collective, which makes back-office software for entrepreneurs, has raised $50 million to expand its AI features. Investors included Innovius Capital, Gradient Ventures and The General Partnership.
Solaris, a Berlin-based embedded finance platform, has raised €38 million in the first close of a Series F led by existing investors.
Cybersecurity startup Savvy, which makes software to reduce risks posed by third-party apps, has emerged from stealth with a $30 million round led by Canaan.
Gene therapy manufacturing startup CoJourney has raised a $30 million Series A led by Legend Holdings.
London-based Raft has received a $30 million Series B led by Eight Roads for its digital freight-forwarding platform.
Jirav, a financial planning and analysis software startup, has secured a $20 million Series B led by Cota Capital.
Sonio, a Paris-based provider of an AI assistant for prenatal ultrasounds, has raised $14 million in a round led by Cross Border Impact Ventures and Elaia Partners.
Wing VC has led a $6 million seed investment in Outverse, a London-based community platform for SaaS companies.
Finres has secured a €4.1 million seed investment led by Speedinvest. The Paris-based company provides software to integrate climate and price risks into investment decision-making.
London-based EV charging startup Go Eve has raised £3 million from investors including The Pearl Family Office, Cur8 Capital and Automotive Ventures. | | | | | |
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| Oklo, a startup developing small modular nuclear reactors, is going public through a SPAC deal with AltC Acquisition that values the company at around $850 million and will provide it with up to $500 million. OpenAI CEO Sam Altman is both the co-founder of AltC and the chairman of Oklo's board. | | | | | |
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Audax Group has closed its seventh flagship PE fund on $5.25 billion and Audax Private Equity Origins Fund I, which focuses on lower-middle-market deals, on $774 million.
May River Capital has closed its third fund on $500 million. The vehicle targets investments in lower-middle-market industrial businesses.
Federated Hermes has closed its fifth PE co-investment vehicle on $486 million. The fund has already committed to 23 investments.
Aimpera Capital Partners has closed real assets-focused Aimpera Fund III and related co-investment vehicles on $475 million.
Berlin-based wealth manager Liqid has closed a €200 million PE fund-of-funds for affluent investors.
Suffolk Technologies, the VC arm of construction firm Suffolk, has raised a $110 million venture fund that will target construction tech companies from the early to growth stages. | | | | | |
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The US Department of Justice is close to deciding whether to challenge Thoma Bravo's proposed acquisition of ForgeRock, a $2.3 billion deal announced in October, Politico reported. The agency's concerns center on the firm's ownership of Ping Identity, another cybersecurity company.
Blue Owl has made a passive, minority investment in Stonepeak, an infrastructure and real assets investor with $55 billion in AUM. | | | | | |
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