S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
Another cycle of earnings calls is about to start for large, publicly traded alternative asset managers. In the second quarter, more than one executive highlighted the opportunity to deploy the industry's near-record levels of dry powder into a market rattled by macroeconomic uncertainty — one that should, in theory, produce some bargain entry points.
"We have almost as [much] dry powder as we've ever had as a firm to invest into the dislocated environment," Robert Lewin, CFO of KKR & Co. Inc., said on the firm's first-quarter earnings call.
The Carlyle Group Inc. CFO Curtis Buser said on the company's earnings call that the private equity team was "fully eager to take advantage of opportunities as they are in the current environment," adding, "I think there's going to be some really neat deals done here in the near term."
So where are those deals?
Private equity (PE) entries have fallen year over year for every single month of 2023. In June, global entry value came to $27.04 billion, a 59.3% drop from $66.41 billion for the same month in 2022. The second quarter total of $98.48 billion represents a decline of 53.5% from the $211.69 billion recorded in the April–June period of 2022.
Stay tuned in the coming weeks for an updated outlook from the industry giants on private equity investment. In the meantime, read more about the year-over-year decline in private equity entries in the second quarter.
CHART OF THE WEEK: Venture capital investment down again YOY in June
⮞ The value of global venture capital investments fell 44.6% in June compared to the same month a year earlier. This marks the 16th consecutive month with a year-over-year decline in venture capital investment value, according to S&P Global Market Intelligence data.
⮞ June also had the fewest venture capital funding round of any month so far in 2023.
⮞ The largest round of the month was Apollo Global Management Inc.'s $2 billion investment in telecommunication services provider AT&T Mobility II LLC.
TOP DEALS AND FUNDRAISING
– KKR & Co. Inc. agreed to buy a 54% controlling interest in Pangeaco SAC from Telefónica Hispanoamérica SAU and Entel Perú SA. The deal includes the existing fiber optic networks of Telefónica del Perú and Entel Perú. KKR plans to invest about $200 million of additional capital to expand the digital infrastructure across Peru by the end of 2026.
– Cinven Ltd. purchased Archer Technologies LLC, a provider of cloud-based integrated risk management software solutions, in a deal with sellers Clearlake Capital Group LP and Symphony Technology Group LLC.
– Alpine Investors completed fundraising for Alpine Investors IX LP, hitting the hard cap of $4.5 billion. The oversubscribed fund had an initial target of $3.75 billion.
– Audax Private Equity closed its Audax Private Equity Fund VII and Audax Private Equity Origins Fund I LP, with both vehicles surpassing their targets. The flagship fund hit the hard cap of $5.25 billion and Origins closed on $774 million.
MIDDLE-MARKET HIGHLIGHTS
– Quadria Capital Investment Management Pte. Ltd. agreed to sell its stake in Vietnam-based FV Hospital to Thomson Medical Group Ltd. through an affiliate. The deal, which is valued at up to $381.4 million, is expected to finalize later in 2023.
– Lower-middle-market private equity firm HCI Equity Partners added Grasshopper Lawns Inc., which provides lawn care treatment services, to its portfolio.
– SHS Gesellschaft für Beteiligungsmanagement MbH and ING Corporate Investments Participaties BV were part of the investor group that purchased a majority stake in CAM Bioceramics BV, a Dutch maker of orthobiologic calcium phosphates.
- The Riverside Co. exited Guestline Ltd., a UK-based software provider to the hospitality market, in a deal with Access Group, which is backed by HgCapital LLP, TA Associates Management LP and GIC Pte. Ltd.
FOCUS ON: ELECTRONIC EQUIPMENT AND INSTRUMENTS
– Beacon Biosignals Inc. acquired neurotechnology company Rythm SAS from Johnson & Johnson Innovation - JJDC Inc. and MAIF Avenir SAS.
– Callista Portfolio Holding GmbH agreed to buy a full stake in Schäfer Group, which makes test gauges for the automotive and aviation markets, from Indus Holding AG. The transaction is scheduled to close in the third quarter.
– Zukunft Ventures GmbH agreed to sell ASAP Holding GmbH, a German provider of electronic component testing, to HCL Technologies Ltd., or HCLTech. The parties expect to close the transaction in September, subject to regulatory clearances.
For further private equity deals, read our latest In Play report, which looks at potential private equity-backed M&A, including rumored transactions, each week.