S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
Private equity's interest in AI is more than mere flirtation. Firms around the globe are racing to understand how AI can add value to portfolio companies, and a handful of the industry's largest players are investing internally in AI tools and teams to produce unique insights from proprietary data and even — someday, possibly — advise on investment decisions.
At the same time, private equity is investing heavily in datacenters and related services and technology — picks and shovels for the AI gold mine. Cloud computing and a broad-based shift to off-premise data storage were already fueling strong datacenter demand. The accelerating AI revolution is pushing that trend line even higher.
Solid growth prospects and strong customer demand give datacenter investors a good line of sight into future revenues, making the assets a cozy fit for private equity infrastructure funds, said Pauline Thomson, head of data science for French private equity firm Ardian.
"It ticks all the boxes of an infrastructure asset," Thomson told S&P Global Market Intelligence.
Read more about private equity's huge bet on datacenters.
CHART OF THE WEEK: Private equity's mountain of dry powder
⮞ Private equity dry powder continued its climb in record territory, increasing to $2.59 trillion globally as of Dec. 1, up 8% from $2.39 trillion in December 2022, according to Preqin and S&P Global Market Intelligence data.
⮞ Hesitancy to deploy capital in the current macroeconomic environment is a significant factor in the accumulation of dry powder, with the $437.85 billion in private equity entries globally between Jan. 1 and Nov. 30 representing a nearly 36% decline from the same 11-month period a year ago.
⮞ Listed private equity firm Apollo Global Management Inc. led the industry with more than $55 billion in uncommitted capital.
TOP DEALS AND FUNDRAISING
– Occidental Petroleum Corp. agreed to purchase oil and gas producer CrownRock LP from Lime Rock Partners LLC and CrownQuest Operating LLC for about $12 billion, including assumed debt. The deal is expected to close in the first quarter of 2024.
– Ara Partners Group LLC raised $2.8 billion in limited partner commitments for the firm's Ara Fund III. The vehicle will invest in industrial companies mainly based in the US, Canada and Europe that seek to reduce carbon emissions.
– Apax Partners LLP secured about $900 million at the final close of its Apax Global Impact Fund. The fund seeks to invest in companies that tackle environmental or social issues.
MIDDLE-MARKET HIGHLIGHTS
– Sterling Investment Partners Advisors LLC sold commercial landscaping company Heartland LLC to Pritzker Private Capital.
– Windjammer Capital Investors LLC wrapped up the acquisition of antibodies manufacturer Bio X Cell Inc.
– Education company Creative Learning Systems secured majority recapitalization from Exeter Street Capital Partners. IBC Funds LLC, Siguler Guff & Co. LP and the target company's leadership team also participated in the recapitalization.
FOCUS ON: FINTECH
– London-based financial services company SumUp Payments Ltd. raised more than €285 million in a funding round led by Sixth Street Growth.
– Funds advised by Apax acquired European financial software companies OCS SpA and Finwave. Charme Capital Partners SGR SpA sold OCS, while the Lutech Group sold Finwave.
– Splitit Payments Ltd. secured $25 million from funds advised by Motive Capital Management LLC, as part of the firm's $50 million growth commitment to the payment technology platform. Splitit delisted from the Australian Securities Exchange following the investment.
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.
__________________________________________________
S&P Global Market Intelligence has launched its seventh annual private equity and venture capital outlook survey to gauge private markets sentiment in 2024. Take the survey here.