S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
The wealth management industry has changed its tune on private equity, which is now one of the dominant forces driving the industry's fast-paced consolidation.
Up until recently, the widely held perception was that private equity's value creation strategies were out of step with the goals of wealth managers and their clients, said Guy McGlashan, CEO of U.K.-based wealth manager London & Capital Group Ltd. That has changed, and now some wealth managers view an infusion of private equity capital as preferable to acquisition by a strategic buyer.
That is in part because private equity's financial resources can be used to expand a wealth manager's products and services without fundamentally changing the firm's character, which risks alienating long-term clients, McGlashan said. The private equity firms active in the space increasingly bring their own financial services expertise to the table, too, added McGlashan, whose firm is being acquired by Lovell Minnick Partners LLC.
Wealth management M&A activity hit an all-time high in 2021, according to consulting firm and investment bank DeVoe & Co., which estimates private equity had a role in 60% of those deals.
Read more about the trend and outlook for 2022.
CHART OF THE WEEK: PE-backed M&A activity rising in asset management sector
⮞ Private equity and venture capital firms have had a role in $2.56 billion worth of M&A activity in the asset management sector this year through June 22, an amount greater than the full-year totals in three of the previous four years.
⮞ Total transaction value spiked to $6.25 billion in 2021, more than quadruple the 2020 total.
⮞ The data lines up with what several sources say was a record year in 2021 for M&A in the wealth management industry, which is part of the asset management sector.
FUNDRAISING AND DEALS
* Eurazeo SE agreed to sell its remaining 51% stake in Trader Interactive LLC to carsales at a valuation of approximately $1.90 billion. The stake sale represents roughly $350 million in pretax proceeds for Eurazeo and its affiliates.
* EQT-backed HMI Group is looking to sell a minority stake that may value the Singapore-based private healthcare provider at about $721 million, Bloomberg News reported, citing people with knowledge of the matter.
* Alternative investment platform Capital Integration Systems LLC, or CAIS, received a strategic capital injection from Hamilton Lane Inc.
* Ardian agreed to acquire a stake in Serma Group, a provider of consulting and services related to electronic technologies, embedded systems and information systems.
ELSEWHERE IN THE INDUSTRY
* Clearlake Capital Group LP will sell Brightly Software Inc., a cloud-based asset management software platform, to Siemens AG. The deal is worth roughly $1.88 billion, including about $1.58 billion of up-front cash.
* Stone Point Capital LLC-managed funds closed the purchase of health and fitness platform Tivity Health Inc.
* Clearlake Capital closed its takeover of protective packaging solutions company Intertape Polymer Group Inc.
* Performant Capital bought interior design software company Design Manager, formally known as Franklin-Potter Associates Inc., from 1stdibs.
FOCUS ON: ENERGY
* Intersect Power LLC, a clean energy company, secured a $750 million growth equity investment led by TPG Capital LP's TPG Rise Climate strategy.
* Bowmark Capital LLP backed the buyout of energy data provider Cornwall Insight.
* Balmoral Funds LLC completed the acquisition of Trecora Resources, a specialty petrochemical company, at $9.81 per share in cash.