S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
The flow of private capital from US-based firms to investment opportunities in China slowed to a trickle in the first half of 2024.
US private equity and venture capital investments in China totaled $280 million in the first quarter and $370 million in the second quarter, according to S&P Global Market Intelligence data. The average quarter in 2021 saw $6.38 billion invested in China-based companies by US-based firms.
Geopolitical tensions between China and key trading partners are a significant factor in the investment decline, especially for investors in the US, who since 2023 have faced restrictions on investments in China's tech sector over national security concerns. Questions about the strength of the Chinese economy have also rattled global investors' confidence.
Investors who want to stay active in Asia-Pacific are pivoting away from China and toward India, Southeast Asia more broadly, and Japan, said Gavin Geminder, global private equity leader at KPMG.
Read more about private equity investment in China by US-based private equity firms.
CHART OF THE WEEK: Fundraising slows for Asia-focused funds
⮞ Asia-focused private equity and venture capital funds raised $33.83 billion globally in the first half of 2024, down 10% from $37.63 billion in the first half of 2023, according to Market Intelligence and Preqin data.
⮞ The number of fund closings declined 62% year over year to 122 in the first half of 2024.
⮞ A top factor in the decline are US restrictions on investment in China's technology sector, said Ricardo Felix, partner and head of Asia-Pacific at Asante Capital Group, a placement firm.
TOP DEALS AND FUNDRAISING
– Sixth Street Partners LLC agreed to buy reinsurance company Enstar Group Ltd. for $5.1 billion. As part of the deal, Enstar shareholders will receive $338 per share in cash. Liberty Strategic Capital and JC Flowers & Co. LLC are also participating in the transaction.
– HPS Investment Partners LLC struck a deal to buy the regional aircraft leasing segment of Chorus Aviation Inc. for about C$1.9 billion in cash and aircraft debt.
– American Industrial Partners agreed to acquire Veolia North America Regeneration Services LLC from Veolia North America LLC for $620 million. The deal is expected to close in the coming days.
– Amulet Capital Partners LP secured about $1.2 billion in capital commitments at the close of Amulet Capital Fund III LP. The fund will invest in healthcare companies.
– Silver Hill Energy Partners LP raised $1.13 billion in capital commitments at the close of its Silver Hill Energy Partners IV LP fund. The vehicle focuses on investing in onshore oil, natural gas and related infrastructure assets in US basins.
MIDDLE-MARKET HIGHLIGHTS
– StoneTree Investment Partners LLC secured $155 million in total capital commitments at the first and final close of its inaugural fund, StoneTree Investment Partners Fund I LP. The lower-middle-market private equity firm invests industrial and manufacturing businesses in North America.
– CORE Industrial Partners LLC made a majority investment in cosmetic products maker Glow Concept Inc., doing business as Winky Lux.
– O2 Investment Partners LP invested in property renovation, restoration and maintenance services provider Centex Construction.
– Novacap TMT is investing in communications tower infrastructure company Communications Tower Group LLC.
FOCUS ON: ELECTRONIC EQUIPMENT
– Rhombus Systems Inc., a video security services provider, raised $45 million in a series C funding round. The financing was led by NightDragon Management Co. LLC, with participation from Bluestone Equity Partners LP and other investors.
– Trio Mobil Bilisim Sistemleri AS, a vehicle tracking systems company, obtained $26.5 million in a growth financing round led by NewSpring Capital LLC.
– CorrosionRADAR Ltd. closed on a round of funding co-led by Aramco Ventures, bringing the total capital raised by the UK-based corrosion monitoring systems company to $14 million.
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