Private Equity

Buyout barons’ dirty secret shows hard times ahead

12 Sep 2024

Since 2013, 47% of the value created by private-equity dealmakers came from selling companies at higher multiples than they paid. That boon is fading now that valuations seem stretched. KKR, Blackstone and others face lower returns or fights over high-growth targets instead.

China brokerage deal has more bark than bite

9 Sep 2024

The merger of Guotai Junan and embattled rival Haitong will create the country’s largest brokerage with assets of $225 bln. The overcrowded sector needs consolidation, but this deal probably won’t aid Beijing’s goal to foster a squad of world-beating investment banks.

Fuji Soft’s $4 bln sale needs a rethink

9 Sep 2024

Shares of the IT software specialist are trading 7% above the price of an agreed takeover offer from buyout firm KKR, and above a higher price its rival sponsor Bain is dangling at the target. After wrestling with a sale, the Japanese company has left too much value on the table.

Buyout barons’ music fest punt is oddly compelling

6 Sep 2024

Private equity and countercultural live events might seem worlds apart. Yet KKR’s recent $1.4 bln purchase of the Superstruct group that runs 80 music festivals has many of the factors buyout shops look for. Scope for a healthy return implies more will take the plunge.

Private equity spoils of war bound to spread again

5 Sep 2024

Bigger funds and more fees have boosted buyout-firm valuations. Even at 26 times earnings, Blackstone trails smaller peer Ares. The shop led by Michael Arougheti is benefiting from a focus on credit and deploying its $450 bln, but an M&A revival and investing masses loom large.

Blackstone $16 bln AI deal borrows from SPAC boom

5 Sep 2024

A group led by Steve Schwarzman’s firm is paying a large sum to buy data centre operator AirTrunk from Macquarie. By tinkering with EBITDA, the buyer can present a low valuation multiple for a purchase in a hot sector. It's unnecessarily reminiscent of the blank-cheque froth.

Tech’s also-rans are ripe for the plucking

30 Aug 2024

Buyout barons are back to spending their $2.6 trln of dry powder, scooping up software companies like PowerSchool and Squarespace. With regulators restraining Big Tech and public market investors increasingly discerning, beleaguered sellers might be ready to take the money.

NFL gives buyout barons a view from cheap seats

28 Aug 2024

The US football league is giving private equity firms access to a coveted investment venue. Returns like the one on the $6 bln Washington Commanders are tempting enough for Carlyle and others to accept tough terms and cede some profit. It’s a steep price for a lousy ticket.

KKR bank sale will gauge India’s fee-paying power

26 Aug 2024

The sponsor is looking for a buyer for Avendus, an investment bank rising up league tables and advising on hot deals, possibly including Swiggy's $1.2 bln IPO. It's a good time to push a sale of the tech sector's banker of choice after an earlier attempt to offload it stalled.

China’s big ball of money has nowhere else to go

23 Aug 2024

Beijing's warnings slowed a rush into government debt sparked by moribund stocks and falling home prices. With US rates set to fall, investing more abroad would be an option if it weren't for capital controls. Unless they're relaxed, the bond-buying frenzy is likely to restart.

Worldline buyout offers rare shot at easy returns

15 Aug 2024

The $2.5 bln French payment firm is an obvious target thanks to its depressed share price. Private equity buyers can wring out a decent return even with zero profit growth in the next few years. And seeing as France is only a minor market, the state is unlikely to meddle.

India convincingly overcomes its IPO demons

14 Aug 2024

Cautious pricing is paying off. E-bike maker Ola surged on its debut and e-commerce platform Brainbees jumped 46%. The success by the unprofitable SoftBank-backed firms clears the way for big deals that will help the country retain Asia's IPO crown as other venues falter.

UK wealth buyout requires elbow grease and luck

9 Aug 2024

After an intense courtship, CVC and Abu Dhabi have snapped up investment platform Hargreaves Lansdown for $7 bln. The rich price tag means the new owners will have to slash costs while cranking up sales to make a decent return. That may be tricky if interest rates keep falling.

KKR shows it’s business as usual in Japan Inc

9 Aug 2024

The US fund is offering $4 bln to take IT-specialist Fuji Soft private, a year after activist 3D kicked off a sales process. Despite a strengthening yen and volatile stock market, it's a reminder that there's still value to be unearthed. Similar deals will keep ticking along.

KKR’s corporate PR deal hangs on more bad news

7 Aug 2024

The buyout group is taking control of financial communications company FGS from WPP. At 15 times 2024 EBITDA, the $1.7 bln valuation is rich but below peer FTI Consulting. For the bet to pay off, CEOs will have to face more major crises that require the PR firm’s pricey counsel.

Singapore bourse may yet be upgraded to also-ran

6 Aug 2024

Policymakers want to end its IPO drought and dismal liquidity. Tax breaks, listing government assets like Changi Airport and encouraging state fund GIC to invest locally could help. But the city-state lacks the wherewithal to be a big draw for business from China and beyond.

Buyout barons enter their spray-and-pray era

2 Aug 2024

Private equity firms like KKR and Apollo have ramped up investment – in turn boosting companies like Ares that provide debt for deals. But as some smaller bets underwhelm, investors are being asked to believe that buyout shops’ contrarian view of the future is the right one.

Two old loves come back to haunt Singapore’s GIC

24 Jul 2024

Taking a long view is a hallmark of the $770 bln sovereign fund. Still, a big exposure to emerging-market equities, including China, and to bonds and cash, is spoiling returns. The city-state has a lot riding on whether that improves in the short term.

Mattel buyout would be fun but dangerous plaything

23 Jul 2024

Despite Barbie’s star power, the $7 bln toymaker’s sinking valuation has attracted suitor L Catterton. A deal can work but looks big enough to be a choking hazard for the LVMH-backed investment firm. Higher tariffs on Chinese suppliers also would make the financial game riskier.

KKR-Eni biofuels deal is rich bet on governments

23 Jul 2024

The US investor could pay up to $14 bln for 25% of the Italian group’s bioenergy arm. That’s a big premium to listed peers, at a time when greener fuels made from crops are less favoured. Long-term growth rates mean it makes sense, but only if states keep assisting the market.