S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
The venture capital market has seen year-over-year declines in investment activity for every month of 2023 so far, and sentiment among fund managers and investors in this sector remains gloomy.
The value of global venture capital (VC) investments decreased nearly 48% year over year in May to $18.85 billion and the number of funding rounds was down nearly 39% from the same month in 2022 to 1,129, S&P Global Market Intelligence shows.
Although the value and volume of VC rounds increased slightly over April's totals and point to a possible revival for full year 2023, recent surveys have not uncovered much optimism in the venture market.
Research and analytics firm Acuity Knowledge Partners (UK) Ltd. found a more pessimistic outlook on fundraising and investment opportunities among global private equity (PE) and VC firms compared with 2022. In survey results released June 13, 55% of respondents expected fundraising to decline in 2023, up from 6% in 2022. About 66% of respondents expected valuations to fall, which Acuity said was a sixfold increase from the 2022 survey.
In a separate report, Coller Capital Inc. surveyed 110 global PE investors and found about three-quarters of limited partners are expecting more down VC rounds in the next 12 months compared to the previous 12 months, meaning startups in their portfolios will be raising new capital at lower valuations than they did after their last rounds of fundraising.
Read more about May's year-over-very decline in VC investment and the largest funding rounds of the month.
CHART OF THE WEEK: PE's growing role in the SPAC market
⮞ As the 2020–2021 boom in IPOs by special purpose acquisition companies, also known as blank-check companies, faded, falling 71% year over year in 2022, PE took on a larger role in the SPAC market.
⮞ Blank-check companies with at least 5% ownership by a PE or VC firm accounted for over 18% of SPAC IPOs in 2022, up from 11% in 2021 and 4% in 2020.
⮞ PE activity in the SPAC marketplace in 2023 remains near 2022 levels, with PE-backed SPACs representing nearly 17% of the blank-check companies that held an IPO between Jan. 1 and May 31.
TOP DEALS AND FUNDRAISING
– Thoma Bravo LP agreed to sell risk management and regulatory software company Adenza Group Inc. to Nasdaq Inc. for $10.5 billion in a cash-and-common stock deal.
– Funds managed by Blackstone Inc.'s Blackstone Tactical Opportunities Advisors LLC bought a majority stake in digital and static signage company New Tradition Media LLC.
– TA Associates Management LP secured $16.5 billion at the close of its latest flagship fund, TA XV, reaching its hard cap. The fund will invest in companies focused on the technology, healthcare, financial services, consumer and business services industries.
– Permira Advisers Ltd.'s specialist credit investor, Permira Credit Ltd., completed the fundraising for its direct lending fund, Permira Credit Solutions Fund V, and raised €4.20 billion in investable capital.
MIDDLE-MARKET HIGHLIGHTS
– Capital Constellation, an investment platform managed by Wafra Inc., made a strategic minority investment in Greenbelt Capital Partners.
– Arcline Investment Management LP added International Water-Guard Industries Inc., which provides proprietary potable water systems and components for business and commercial jet applications, to its portfolio.
– Appian Capital Advisory LLP will sell its battery metals-focused portfolio companies Atlantic Nickel and Mineração Vale Verde Ltda. to ACG Acquisition Co. Ltd. in a cash deal worth $1 billion. The transaction included the sale of the gold royalty on Mineração Vale Verde to ACG for $65 million.
– Kohlberg & Co. LLC affiliates agreed to purchase business advisory firm Riveron Consulting LP in a deal expected to close in July. HIG Capital LLC will continue to own a minority stake in Riveron.
FOCUS ON: HEALTHCARE
– An investor group comprising Versant Venture Management LLC, OrbiMed Advisors LLC, Apple Tree Partners, Northleaf Capital Partners Ltd., Ally Bridge Group and Samsara BioCapital LLC agreed to sell biotechnology company Chinook Therapeutics Inc. to Novartis AG for $3.2 billion upfront.
– Bailador Technology Investments Ltd. will divest Australian healthcare technology company InstantScripts Pty. Ltd. to Wesfarmers Ltd.-owned Australian Pharmaceutical Industries Ltd. for about $135 million.
– Grovecourt Capital Partners added teleradiology services provider Premier Radiology Services LLC to its portfolio.
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.