Is this the end of co-investments?

Charting returns across 7 asset classes; bigger isn't better for continuation funds; Q&A: VCs turn to non-dilutive financing

Read online | Don't want to receive these emails? Manage your subscription. Log in The Daily Pitch: VC, PE and M&A February 7, 2024 The Daily Pitch is powered by PitchBook's industry-defining research and best-in-class data In today's Daily Pitch, you'll find: Will the influx of capital from high-net-worth LPs mean fewer co-investment opportunities? Our Private Capital Indexes now have asset class returns data as of Q3 Q&A: Why more startups are turning to non-dilutive financing The enterprise fintech sector looks to payroll tech for innovation Continuation fund investors are piling into smaller, middle-market vehicles   Today's Top Stories   The crowding-out effect (Marco Bottigelli/Getty Images) Private market funds dedicated to high-net-worth individuals could crowd investors out of co-investment opportunities, industry players warn. These semi-liquid vehicles, like Blackstone's $1.3 billion fund for wealthy individuals, open up a novel and expansive pool of capital for GPs, capital that could be used to finance deals without additional third-party dollars. read more   Share: Private markets hot streak cooled—but growth remains Real estate and funds-of-funds were the only private market asset classes to show improvement in their quarterly returns in Q3. Real assets halted a positive streak to turn negative. Altogether, industry performance dropped back to 2022 levels of slight growth. Our latest Private Capital Indexes report, now with data as of Q3 2023, charts out returns across seven private market asset classes and 13 subcategories, including adjusted metrics for use in risk measurement. read the report   Share:   A message from McDermott Will & Emery   Connect with top healthcare dealmakers on South Beach Take your business to the beach this March at HPE Miami 2024. This two-day event brings together investors, founders, bankers and top-tier deal lawyers for unparalleled networking and insightful programming. Break out your sandals and make new connections in a relaxing conference environment. Don't take McDermott's word for it, hear why attendees keep returning: "The venue really lends itself to organic networking, which you don't often get at these types of conferences." "McDermott conferences are amazing. They do the best job of getting the right people in the room and making connections." Reserve your spot today Share:   Q&A: A booming alternative for startups seeking funding Capchase CEO Miguel Fernandez (Piaras Ó Mídheach/Getty Images) Non-dilutive financing has become significantly more popular with startups in recent years. We spoke to Capchase CEO Miguel Fernandez about how a more challenging VC market has created rising demand for this form of alternative funding, and about what's ahead in 2024. read more   Share: Social, economic trends fuel enterprise fintech's payroll innovation Enterprise fintech is on a roll: It's eating up more VC dollars than its retail fintech counterpart. In Q4, deal value was up 19.6%, reaching $4.7 billion across 304 deals. According to PitchBook's latest Emerging Tech Research, new innovations within payroll technology may be the next big thing in fintech. The report dives into the startups and key trends within the enterprise fintech space while touching on what new regulations may mean for the future. read the preview   Share: Why secondary buyers prefer mid-market continuation funds (FabrikaCr/Getty Images) Not all investors believe bigger is better, especially those shopping for continuation funds. And they found a sweet spot in middle-market vehicles. Continuation funds below $1 billion in size benefit from the versatility of exit mechanisms for smaller assets and offer a lighter lift for secondary buyers. read more   Share:   Since yesterday, the PitchBook Platform added: 659 Deals 2697 People 885 Companies 27 Funds See what our data software can do   The Daily Benchmark: 2020 Vintage North American Secondaries Funds Median IRR 18.80% Top Quartile IRR 28.74% 0.18x Median DPI Select top performers Dover Street X Blackstone Strategic Partners Infrastructure III RCP Secondary Opportunity Fund III Overage Fund *IRR: net of fees 14 Funds in Benchmark » Check out the latest version of PitchBook Benchmarks   VC Deals   Austin-based NinjaOne raised a $231.5 million Series C led by Iconiq Growth for its IT platform. Starship Technologies, a San Francisco-based developer of autonomous delivery robots, raised $90 million led by Plural and Iconical. Ambience Healthcare raised a $70 million Series B co-led by OpenAI Startup Fund and Kleiner Perkins. The San Francisco-based company offers AI-powered tools for healthcare providers. Biotech startup Attralus secured a $56 million investment led by Alpha Wave Ventures. Ionix, an Israeli cybersecurity startup, raised a $42 million Series A led by Maor Investments. India's River, an electric scooter startup, raised a $40 million Series B led by Yamaha Motor. Spanish plant-based meat specialist Heura Foods closed a €40 million Series B from investors including Unovis Asset Management, European Circular Bioeconomy Fund and New Tree Impact. London's Colossyan secured $22 million in a round led by Lakestar for its AI video generator. Saleor completed an $8 million seed extension led by Target Global. The Polish company offers an open-source ecommerce platform. Bulgaria's Evrotrust raised €3.3 million from investors including Silverline Capital for its ID verification platform.   PE Deals   Blackstone is in talks to buy Ireland-based data center builder Winthrop Technologies in a deal that could value the business at around £700 million, Sky news reported. Blackstone is mulling a bid for Hong Kong-listed skincare firm L'Occitane International, Bloomberg reported. Copenhagen-based investor Novo Holdings has invested in Indian healthcare provider Manipal Hospitals. Hellman & Friedman and Valeas Capital Partners have picked up a majority stake in US accounting firm Baker Tilly. Haveli Investments has agreed to acquire Nasdaq-listed cybersecurity company ZeroFox Holdings for an enterprise value of $350 million. The Abu Dhabi Investment Authority may buy a minority stake in PAG-backed Zhuhai Wanda Commercial Management Group, the mall operator unit of Dalian Wanda Group, Bloomberg reported. Keensight Capital and NYSE-listed B2B SaaS company ServiceNow have made a strategic investment in IT consultancy Plat4mation. Audax Private Equity-backed healthcare consultancy firm Chartis has acquired Chicago-based payer-focused consultant HealthScape Advisors, Axios reported.   Portfolio Companies   HIG Capital has established a resort hotel platform after combining hotel assets in its portfolio. Ella Hotels & Resorts comprises 13 hotels in Greece and plans to expand farther in Southern Europe.   Exits & IPOs   CVC Capital Partners is weighing a sale of Good Choice, Bloomberg reported. The South Korean company develops a travel booking app.   Fundraising   Texas-based PE firm Trinity Hunt Partners closed its Fund VII on $700 million. Encore Consumer Capital closed its Fund IV on $258 million. London-based early-stage investor Episode 1 closed its third fund on £76 million. The vehicle will make up to 15 investments a year, primarily targeting UK startups.   Chart of the Day   "While the macroeconomic environment appears to have stabilized somewhat in late 2023 and early 2024, one or two quarters of stronger quarterly returns should not be considered a harbinger of recovery for real estate performance. With the prevailing narrative around real estate focusing on pockets of opportunity in noncore sectors, the subtext is that challenges are expected to persist for office, and to a lesser extent, portions of the multifamily, logistics, and retail sectors, in the coming year." Source: Q2 2023 Global Fund Performance Report (with preliminary Q3 2023 data)   Who's in the newsletter today? Investors Abu Dhabi Investment Authority Alpha Wave Ventures Audax Private Equity Blackstone CVC Capital Partners Chartis Encore Consumer Capital Episode 1 European Circular Bioeconomy Fund HIG Capital Haveli Investments Hellman & Friedman Iconical Iconiq Growth Keensight Capital Kleiner Perkins Lakestar Maor Investments New Tree Impact Novo Holdings OpenAI Startup Fund PAG Plural ServiceNow Silverline Capital Target Global Trinity Hunt Partners Unovis Asset Management Valeas Capital Partners Yamaha Motor Companies Ambience Healthcare Attralus Baker Tilly Colossyan Dalian Wanda Group Evrotrust Good Choice HealthScape Advisors Heura Foods Ionix L'Occitane International Manipal Hospitals NinjaOne Plat4mation River Saleor Starship Technologies Winthrop Technologies ZeroFox Holdings Zhuhai Wanda Commercial Management Group   About PitchBook | Terms of use | Advertise with us | Contact Follow us: This email was sent to edwardlorilla1986.paxforex@blogger.com via the PitchBook Platform. 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