Private Equity

Vision Fund will struggle to shrug off WeWork flop

7 Oct 2019

One bad bet shouldn’t jeopardise SoftBank’s $100 bln vehicle. Yet the office sublessor’s failed float undermines the thesis that copious capital brings success and raises doubts about other punchy valuations. Future IPOs which the fund needs to repay investors look a lot harder.

German lighting mess has glimmer at end of tunnel

7 Oct 2019

AMS’s failed bid for Osram leaves the Munich-based group looking friendless and saddled with a blocking stake that might deter private equity. Yet Bain and Advent could afford to offer more without destroying their returns. If they do, it may suit seller, unions and even AMS.

Europe’s IPO bankers more like badgers than dodos

3 Oct 2019

Proceeds from stock raises are at a seven-year low, and fees are stingier than in the U.S. Add structural threats, and equity arrangers might appear to face extinction. In fact, the need to maintain client ties means the sector faces a badger-style cull, not a dodo-style fate.

Hadas: Passive funds help, and hurt, stock markets

2 Oct 2019

More than half the dollars in U.S. equity funds now mimic indexes. The trend to thought-free investing lowers fees and may limit the supply of dumb money. But it adds to the economic irrelevance of public markets and gives poor incentives to both boards and politicians.

Leveraged loan partygoers take a much-needed rest

1 Oct 2019

Growth in risky corporate debt has slowed. Investors worrying about the economy are driving a harder bargain with private equity-owned groups like Shutterfly and Sotheby’s. Yet sovereign bond yields are ultra-low and buyout firms have huge cash piles. The lull may be temporary.

Bain’s Osram bid is insufficiently illuminating

26 Sep 2019

The buyout group and new partner Advent may outdo a 4.3 bln euro cash offer for the German lighting group from Austria’s AMS. Yet the latter’s proposal must lapse before shareholders can see what Bain is bidding - which may be less appetising. Osram should stick to its guns.

SoftBank woes give tech funding rivals more space

25 Sep 2019

Masayoshi Son’s firm has poured billions into Silicon Valley, sometimes deploying sharp elbows. Trouble at holdings like WeWork may slow it down. That helps rival investors like Sequoia. It’s also good timing for Blackstone’s new growth fund as it prepares to start investing.

Europe’s $8 bln buyout star outshines U.S. rivals

24 Sep 2019

That’s the market value of Swedish firm EQT after its share price popped 25% on its first morning. The valuation makes sense if pension funds and others keep pouring cash into private equity. Still, the premium to larger and more diverse groups like Blackstone is striking.

Defence deal puts post-Brexit UK in crosshairs

18 Sep 2019

The government is reviewing the $5 bln acquisition of Cobham by U.S. buyout group Advent. The aviation contractor’s investors already approved it, and national security concerns are spurious. Blocking the sale would imply Britain’s post-Brexit future is more closed than open.

Buyout offers exit if Thyssen gets stuck in lift

17 Sep 2019

Advent, Cinven and ADIA are lining up a bid for the German conglomerate’s elevators, the FT says. Thyssenkrupp may prefer trade rival Kone’s greater scope to offer an enticing price. But private equity has less to worry about from the EU’s recently reappointed antitrust chief.

Chinese video-games takeover bid may start a trend

10 Sep 2019

Internet pioneer Sohu is offering to buy out minority investors in a U.S.-listed gaming subsidiary for a near-70% premium. The move looks opportunistic: the shares, hit by Beijing’s regulatory crackdown, are at less than half of a 2017 peak. Peers could lure bargain hunters too.

Vision Fund gets handed ill-timed reality check

6 Sep 2019

SoftBank’s $100 bln fund has made strong paper returns. But now WeWork may float at under half its private valuation, Uber is 28% below its IPO price, and Slack has dropped 22% since a direct listing. It’s a bad time for CEO Masayoshi Son to pass the cap for the $108 bln sequel.

Swedish buyout firm places faith in public markets

2 Sep 2019

EQT may raise $550 mln in an IPO, soon after rival BC Partners raised a similar amount in a private sale. Both want to grow abroad and in credit and real estate. Yet choppy markets and the difficulty of valuing private equity firms make EQT CEO Christian Sinding’s job harder.

AMS takes a leap of faith with Osram offer

12 Aug 2019

The Austrian company that supplies Apple has made a 4.3 bln euro offer for the German lighting firm including debt. Diversifying is good, as is a plan is to exploit the growth of driverless cars. But piling on debt to clinch the deal is a risk given ambitious synergy assumptions.

Blackstone shows BC who’s the junior partner

6 Aug 2019

The buyout firm run by Stephen Schwarzman is taking a stake in BC Partners. That will fuel the London-based outfit’s expansion into real estate and private credit, and avoid the need for a public listing. Blackstone already has all that. This deal will help keep it a step ahead.

The Exchange: China’s unicorn squeeze

5 Aug 2019

Mainland startups are under pressure, as once-plentiful funds dry up. Jixun Foo, managing partner at GGV Capital and a backer of tech giants like Didi Chuxing, discusses with Alec Macfarlane why the drop-off in financing could ultimately benefit investors.

KKR gets a biscuit LBO do-over Down Under

2 Aug 2019

The private equity fund that invented the cookie buyout is acquiring Campbell's Australian snacks unit for $2.2 bln. It’s less audacious than the $25 bln RJR Nabisco deal 30 years ago. But if KKR can scrape out decent growth and profitability, this one may prove tastier.

Thomson Reuters beats Blackstone in Refinitiv deal

1 Aug 2019

If the financial data provider clinches a $27 bln takeover by the London Stock Exchange, the buyout firm will make a handsome return. Yet an insurance policy designed to protect its downside works in its Canadian co-investor’s favour. Thomson Reuters may almost triple its money.

Carlyle a late but welcome arrival at C-Corp party

31 Jul 2019

The U.S. buyout firm is finally joining rivals in ditching its partnership for a corporate structure. Better yet, it’s giving shareholders voting rights, unlike its peers. Insiders retain control, but it’s a governance improvement that widens the potential market for its shares.

LSE’s $27 bln data deal is bold independence bid

29 Jul 2019

The London exchange owner has long been a takeover target. Now CEO David Schwimmer is looking to buy financial information outfit Refinitiv. That would tap new growth and business lines and diversify outside the UK. It’s a big, complex and highly leveraged attempt to go it alone.