S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
As US private capital pivots away from China, domestic private equity firms and Middle Eastern sovereign wealth funds are stepping in to fill the gap.
Global private equity and venture capital firms invested $68.80 billion in mainland China companies in 2023, the lowest annual total in at least five years, according to S&P Global Market Intelligence data. US-based firms invested $7.25 billion in mainland China in the past year, their lowest total since 2019.
Rising tensions between the two global superpowers and concerns over the direction of China's economy are both factors in the decline. US firms may also face even tighter restrictions on investment in China's technology sector.
That has created an opening for Middle East-based sovereign wealth funds such as Mubadala Investment Co. PJSC, which recently opened a Beijing office, Peter Lu, partner and global head of McDermott Will & Emery's China practice, told Market Intelligence. China's domestic firms are staying busy, too, participating in most of the country's largest private capital-backed deals in 2023.
Read more about declining private equity investment in mainland China.
CHART OF THE WEEK: Metaverse venture capital dries up
⮞ Funding rounds involving metaverse companies raised just $530 million in 2023, down 87% from $4.09 billion in 2022, according to Market Intelligence data.
⮞ Buzz around the metaverse — a potential evolution of the internet into immersive, three-dimensional virtual spaces — peaked in 2020 and 2021, and technology investor attention has moved on to generative AI, according to a recent EY report.
⮞ Roughly half the private capital raised for metaverse companies in 2023 flowed to businesses in the US and Canada.
TOP DEALS AND FUNDRAISING
– KKR & Co. Inc. agreed to buy Broadcom Inc.'s end-user computing division for roughly $4 billion. The division will become a stand-alone company upon the closing of the deal.
– New Mountain Capital LLC offered to buy healthcare services company R1 RCM Inc. for $13.75 per share in cash. R1 shareholder Coliseum Capital Management LLC said the offer undervalues the company.
– EQT AB (publ) raised €22 billion in total commitments at the final close of its EQT X fund. The vehicle invests in healthcare, technology and technology-enabled services companies in Europe and North America.
– Ocean Avenue Capital Partners LP closed the Ocean Avenue Fund V LP at its $600 million hard cap. The latest fund brings the lower middle market firm's assets under management to about $1.9 billion.
MIDDLE MARKET HIGHLIGHTS
– Astara Capital Partners LP invested an undisclosed sum in interior finishes provider and installer Ally Building Solutions LLC.
– Mill Point Capital LLC completed the sale of retirement plan compliance and administration services provider Prime Pensions to Lightyear Capital LLC. Mill Point owned the company for three years.
– LongueVue Capital LLC provided strategic growth capital to kitchen and bathroom fixtures company Kingston Brass Inc.
FOCUS ON: HEALTHCARE TECHNOLOGY
– Clinical documentation AI company Abridge AI Inc. raised $150 million in a series C investment round led by Lightspeed Venture Partners.
– Healthcare technology data and analytics company Health Data Vision Inc., or Reveleer, raised more than $65 million in a round led by Hercules Capital Inc.
– Healthcare data platform b.well Connected Health Inc. secured $40 million in a series C growth round led by Leavitt Equity Partners.
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.