Private Equity

IPO bankers may as well hit the beach until autumn

26 Jan 2023

A handful of mid-sized European companies are working on stock market debuts. But the upcoming share offerings are too small to reopen Europe’s drowsy equity capital markets. Regional ECM bankers may as well take to their sun loungers until things pick up in the third quarter.

Nordic bidding war is tricky model for LBO revival

25 Jan 2023

Bain Capital and Triton are locked in a battle for $1.2 bln Finnish maintenance firm Caverion. High debt costs make buyouts challenging, but the target has a cheap valuation, a simple turnaround story and green appeal. That combination may not be easy to replicate.

EQT embodies private markets’ two big problems

18 Jan 2023

Shares in the $28 bln buyout group fell 6% after CEO Christian Sinding flagged a fundraising slowdown. Another issue is that, like its rivals, the Swedish firm spent big when asset prices were high. Its relatively steady fund valuations may not yet reflect all the future pain.

CVS maintains unhealthy M&A lifestyle

12 Jan 2023

The drugstore chain owner may buy Oak Street, a fast-growing network of doctors treating older patients. A mooted $10 bln price sounds high given the cash burn and risk of a government crackdown. It would be another ill-advised deal for boss Karen Lynch’s growth strategy.

Blackstone’s clever REIT deal punts big question

4 Jan 2023

A $4 bln investment in its real-estate fund shows Blackstone can pull in big-name money on good terms for itself. It doesn’t, though, prove the fund’s assets are worth what they claim to be. Steve Schwarzman’s firm has firepower aplenty, but hasn’t answered valuation qualms.

New threats will corrode infrastructure M&A

30 Dec 2022

Blasts that damaged Baltic pipelines in September alerted investors to the physical risks to energy networks from geopolitics. Add growing cyber concerns and the cost of insurance is set to rise. As the appeal of formerly quasi risk-free bets dims, states will surely step in.

Private lending will grow up by slimming down

22 Dec 2022

The industry led by Ares and Blackstone reached over $1.3 trln in assets, but now faces a reckoning. Lenders that took risky bets to compete with banks face difficult negotiations with private-equity borrowers. Bigger, more sophisticated players should still thrive.

Venture capitalists’ pain could be humanity’s gain

22 Dec 2022

Rate hikes have sapped enthusiasm for crypto, metaverses and gimmicky startups, with funding down 27% year-on-year. That will free up money to focus on nanotechnology and AI, which can boost lifespans and productivity but take longer to commercialise. Less frivolity is welcome.

Blackstone gets a slap from efficient markets

8 Dec 2022

Clients have pulled money from funds like BREIT, whose purported strength is that their valuations aren’t subject to public markets’ whims. That offered stability during recent strange times. But if investors decide the market’s pessimism might be justified, there’s a problem.

Banks’ buyout-debt machine defies quick jumpstart

8 Dec 2022

SocGen, BNP and Deutsche are buying slices of their own European collateralised loan obligations, which turn private-equity loans into bonds. That has echoes of 2008-style excess, but it’s not too risky. Their bigger problem is that the $1 trln market may be inexorably slowing.

SPACs and crypto are just the tip of the iceberg

6 Dec 2022

Low rates pushed investors into risky pools of money – blank, digital, illiquid or otherwise. A defunct deal involving stablecoin issuer Circle shows that the go-go days are over. But other, much bigger, problems may be lurking in the murkier worlds of buyouts and private credit.

Blackstone’s BREIT slump looks nasty but not fatal

2 Dec 2022

The buyout goliath’s market value fell nearly $8 bln on news that investors were fleeing its flagship property fund. That doesn’t look like an augur of crisis for Steve Schwarzman’s firm. But it does suggest a nasty black eye to one of Blackstone’s best earners.

Blackstone feeds private-market valuation fears

1 Dec 2022

The buyout shop is limiting redemptions from a $125 bln real estate fund after investors flooded it with requests, echoing a broader selloff in publicly traded peers. Limiting withdrawals risks a dangerous feedback loop. And a profitable Las Vegas deal offers limited reassurance.

Eni’s $6 bln Neptune swoop will be a haggle-fest

1 Dec 2022

Italy’s $52 bln oil major may bid for the private equity-backed gas producer. Windfall tax and recession risks make the $10 bln price tag from last year’s mooted IPO unlikely. But Eni’s scope for synergies and need to pivot to gas give owners like CVC scope to hold out for more.

Private equity’s pay boom may have peaked

29 Nov 2022

The average European buyout partner has 20 mln euros of outstanding carried interest in their current fund, reckons Heidrick & Struggles, up a quarter from 2021. Junior wages soared. Yet a possible fundraising slowdown and layoffs elsewhere in finance will slow the gravy train.

Vodafone picks complex way to shorten to-do list

9 Nov 2022

The 29 bln pound telco is selling up to half an 82% stake in its towers arm to KKR and GIP. Investors will like a delisted Vantage’s scope for more debt, and cuts to Vodafone’s leverage. But the added structural complexity rubs against efforts to remove its valuation discount.

Carlyle plays an ever-tougher game of catch-up

8 Nov 2022

The buyout shop raised only $6 bln in the third quarter, a 72% drop from 2021. It’s also managing less money, about $370 bln, as peers accumulate more. And misgivings have spilled into public markets. Whoever replaces abruptly departed boss Kewsong Lee faces a long to-do list.

Blackstone strikes twice with Emerson carve-out

31 Oct 2022

The buyout firm is taking control of the U.S. industrial group’s heating and aircon division for $4.4 bln. The deal resembles Blackstone’s 2018 purchase of Thomson Reuters’ data business. The buyer flipped that at a profit within a year; a repeat is not out of the question.

Blackstone black box is buyout shops’ hot product

21 Oct 2022

The asset manager marked its private equity assets down 0.3% this quarter – far less than public-market declines. For clients who piled $44.8 bln into its funds, that disconnect has appeal. For the industry, it's a balancing act until the real valuation test of M&A returns.

Goldman Sachs alumni rebuild Goldman of yore

20 Oct 2022

Byron Trott’s BDT boutique is uniting with Michael Dell’s $20 bln investment firm, also led by a veteran of the Wall Street bank. Backing clients under a veil of privacy and less regulation evokes pre-IPO Goldman. Preserving the culture should be easier in a small shop.