S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
Real estate debt funds have an opening to increase their lending to property owners and acquirers as banks trim their exposures to the commercial real estate market, but fundraising is flagging.
The $12.3 billion raised by such funds this year, through Oct. 15, represents less than half their full-year fundraising total of $26.25 billion for 2023. Real estate debt funds are on track for a third consecutive annual decline in new fund commitments, according to an S&P Global Market Intelligence analysis of Preqin data. Dry powder was on a similar path, declining to $76.4 billion in aggregate from a high of $105.5 billion in 2021.
That trend may be tough to turn around, thanks partly to a real estate market showing signs of stabilizing after two years of sliding valuations. A possible rebound is driving more investors from real estate debt to equity investments, where they have a chance to catch some of the upside of rising property values.
The longer-term prospects for real estate debt still look good to insiders, particularly when it comes to refinancing existing loans. They are counting on banks to remain sidelined as a wave of commercial real estate loan maturities crests at $1.26 trillion in 2027.
Read more about fundraising trends for real estate debt funds.
CHART OF THE WEEK: Pension funds with the largest PE allocations
⮞ The top 20 global pension funds with the largest allocations to private equity had a combined $707.6 billion of their portfolios dedicated to the asset class as of Oct. 22, according to S&P Global Market Intelligence data.
⮞ At $143.86 billion, Canada Pension Plan Investment Board has the largest private equity allocation of any pension fund.
⮞ Funds managed by Blackstone Inc. were the most popular among the top 20 private equity allocators, based on the number of commitments.
TOP DEALS AND FUNDRAISING
– BC Partners LLP agreed to sell a majority stake in Garda World Security Corp. to HPS Investment Partners LLC, Oak Hill Advisors LP, One Investment Management Ltd. and others in a deal valuing the security services provider at C$13.5 billion.
– Berkshire Partners LLC raised about $7.8 billion in capital commitments at the close of Berkshire Partners Fund XI. The firm invests in middle-market companies.
– Quantum Energy Partners LLC secured $5.25 billion at the close of its private equity flagship fund Quantum Energy Partners VIII LP. The firm invests in oil and gas, midstream, thermal and renewable power generation, energy infrastructure and energy transition companies.
– H.I.G. Capital LLC raised $2 billion in capital commitments at the close of its H.I.G. Capital Partners VII LP. The vehicle will make controlling equity investments in lower middle-market companies in the US.
– Adams Street Partners LLC secured $1.1 billion in committed capital at the final close of its Adams Street 2024 Global Fund LP program. The program will focus on small- to mid-growth private companies.
MIDDLE-MARKET HIGHLIGHTS
– Inverness Graham Investments Inc. secured $238 million at the final close of its Inverness Graham Green Light Fund. The vehicle targets control buyouts of environmental sustainability companies in the lower middle market.
– OceanSound Partners LP acquired integrated radio frequency and advanced communications solutions provider Antenna Research Associates Inc. Financial terms of the deal were not disclosed.
– Great Hill Partners LP partially sold field service management software company BigChange Group Ltd. to Simpro Software Pty. Ltd. Terms of the sale were not disclosed.
FOCUS ON: HEALTHCARE EQUIPMENT
– Heart valve treatment device maker Innoventric Ltd. raised $28.5 million in a series B funding round led by RA Capital Management LP, Axios reported, citing Innoventric CEO Amir Danino.
– Urology therapeutics company Vensica Medical Ltd. raised $11 million in a funding round led by Israel Biotech Fund.
– Glucose monitoring maker Provigate Inc. secured ¥830 million in an equity investment. A fund managed by the Regional Economy Vitalization Corp. of Japan and other organizations participated in the investment.
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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.
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