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| In today's Daily Pitch, you'll find: | | | | | |
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| A look ahead at the LP playbook | | Portfolio construction adjustments are in store for allocators next year. In 2023, LPs found themselves in uncharted waters, with a frosty dealmaking environment and crippled exits suffocating distributions. As we move into 2024, these jilted fiduciaries are reevaluating the newfound risks and opportunities for their portfolios.
Our 2024 Allocator Outlook explores these recent developments and potential paths forward for LPs and their private market allocations. We focus on three factors that impact return expectations across asset classes: valuations, relative attractiveness to public markets and the supply of available capital. | | | | | | | | | PE holds fast on software industry | | We're far from the heydays of the pandemic lockdown-induced software boom, but conditions are ripe for another strong run by PE-backed software companies.
Software providers' margins are up, tech deal counts are better than pre-pandemic levels and SaaS business models remain compelling. As firms like Thoma Bravo and Vista Equity Partners bring in revenues rivaling top software corporations, our analysts dive deep on PE funding for the tech sector. | | | | | | | |
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| A message from West Monroe | | |
| 2024 outlook: The future of the private equity industry | | In a year of halted exits, the industry's turn towards sustainable growth anticipates rich dividends in 2024, underscored by a deepened focus on data and AI, paving the way for expanded opportunities. West Monroe's 2024 Private Equity Outlook delves into this paradigm shift, spotlighting pivotal trends transforming the landscape.
Key insights: - The industry's shift toward sustainable growth promises returns in the upcoming year
- The strategic emphasis on data and AI unlocks vast potential for innovation and growth
- Urgent cybersecurity priorities emerge due to struggles in implementing and monitoring crucial cyber controls resulting in substantial gaps across private equity portfolios
Explore the challenges, trends, and actions that will define the year in private equity. Download West Monroe's 2024 Outlook.
Download the report | | | | | | | |
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| Accel raises $650M on the back of Klaviyo, Pismo exits | |  | | (PM Images/Getty Images) | | | | Accel has closed its 16th flagship fund on $650 million. The early-stage fund, which raised the equivalent amount of capital as Fund XV in 2021, is one of the largest US venture funds to close in Q4 2023, in what remained the toughest fundraising year in recent memory for the asset class. | | | | | | | | | The Amazon trickle-down effect | | In ecommerce, Amazon's problems are often everyone's problems. Consumers went diving for deals on Prime Day, and in so doing pared back on purchases from other retailers. High inflation softened consumer spending, which in turn has cut into bottom lines across the sector, according to our latest Emerging Tech Research.
The labor market is still tight, so retailers and VCs alike are betting on AI-powered fulfillment robotics systems, and emerging markets in Latin America and India are motivating retailers to expand into new regions. But with VC deals and valuations overall encroaching on decade lows, it's still a long road left ahead until retail bliss. | | | | | | | | | The investors cutting the most checks for supply chain startups | |  | | (Sean Gallup/Getty Images) | | | Supply chain startups reached a high-water mark for VC funding in 2021, bringing in $62.2 billion. At the time, lockdowns and port closures motivated investors to seek out founders with ideas to disrupt an industry with a reputation for being static, inflexible and inefficient.
Two years later, the fundraising flood has slowed to a trickle. Although it's tough going for founders in today's climate, some dealmaking is still happening.
Take a look at the most active global investors in VC-backed supply chain tech deals since 2019. | | | | | | | | | AI agents poised to disrupt SaaS | | Despite the VC downturn, generative AI remained strong in Q3, according to our recent Emerging Tech Research. While much of the excitement was fueled by Big Tech giants pouring billions into generative AI startups, PitchBook tracked 1,650 VC deals worth $21.1 billion in AI and machine learning in Q3.
And there are still untapped opportunities within the vertical, including coding automation and AI hardware. | | | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 35 Deals | 87 People | 55 Companies | | | | | | |
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The Daily Benchmark:
2015 Vintage Global Real Estate Funds | | | | | | |
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Toronto-based PE firm TorQuest Partners has reached $2.1 billion final close on its sixth namesake fund, which will target middle-market investments.
France's Partech has launched a €360 million venture fund to invest in up to 24 Series A or Series B European companies.
Chicago-based Motivate has announced its $81 million Fund II, which is focused on sectors including AI, manufacturing and supply chain, SaaS, B2B marketplaces, and insurance. | | | | | |
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"Real assets fundraising activity was highly anomalous in the first three quarters of 2023. With just $24.4 billion in commitments split among the 34 vehicles that closed through September, the year could be the slowest the asset class has seen in at least a decade from a fundraising perspective."
Source: Q3 2023 Global Real Assets Report | | | | | |
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