Private Equity

Brookfield’s rose sits amid growing thorns

9 May 2024

The parent company’s $929 bln asset manager has a model rivals crave: a pure fee-earning machine with stable income. Yet it sits amid a web of listed entities and its fee structure is getting complex. As deals come to the fore, its unusual model will weigh on valuation yet again.

EQT strikes a deal for post-Covid tech hangover

9 May 2024

Despite a 75% premium, the buyout shop’s take-private of IT consultancy Perficient values it on par with peers thanks to a sagging share price. The collapse of giddy Covid-era tech valuations and deals has lingered enough for some buyers to swoop back in without overstretching.

Swiggy IPO serves next dish in Indian food wars

9 May 2024

The Prosus-backed delivery app is readying a $1 bln float after its private-market price tag hit $13 bln. Heady growth and its rival's rich valuation will help. But Zomato's stronger financial health ups pressure for unprofitable Swiggy to manage costs amid a looming price war.

Sumitomo offers a glimpse of activism future

8 May 2024

The shares of the powerful $34 bln trading house surged on Warren Buffett's support. US investor Elliott is using the momentum to squeeze more value out of the company. The next big targets for pushy investors in Japan are marginal, not blatant, underperformers.

Ship IPO puts wind back in Korea Inc’s sails

8 May 2024

KKR-backed HD Hyundai Marine Solution surged more than 40% in the largest float on the bourse in two years. The successful $540 mln listing will spur some IPO momentum, and might even help the $1.8 trln stock market catch up with regional peers.

Green spending strain boosts infrastructure buyers

6 May 2024

GIP, soon to be part of BlackRock, is buying Allete, an energy firm that is set to spend over $4 bln on clean power. Listed utilities’ funding costs are rising while green upgrades demand big outlays, a tasty opportunity for infrastructure funds with $350 bln of capital.

‘Be like Buffett’ mantra takes on new meaning

6 May 2024

Financial masterminds like KKR’s Henry Kravis aped Berkshire’s model by soaking up permanent capital. Yet their stocks have more recently bested the Omaha Sage, burnishing reputations that win plum deals. As Berkshire’s guard changes, New York firms may now overshadow the master.

Private equity giants choose their own adventures

2 May 2024

Blackstone, Carlyle, KKR and Apollo’s first-quarter earnings each illustrate a different central quest: sustaining the firm, fixing it, reshaping it or growing it. With a total $2.7 trln of assets, all four are hitting some new goals, but still have their own ogres to vanquish.

Bain could be third time lucky in Japan

2 May 2024

It's pushing an IPO of Kioxia again after talks to merge the chipmaker collapsed last year. A deal would help pare a $6 bln company loan. Timing is on the sellers' side; demand for chips and Japanese stocks is robust. Rival buyout firms will cheer a successful selldown too.

Japan’s hottest new activist isn’t an activist

30 Apr 2024

Hiroyuki Otsuka, formerly at Carlyle, raised $1 bln from MUFG, Mizuho and other local firms for his debut engagement fund. The next phase for unlocking value in Japan will depend less on foreigners. But keeping bosses happy while pushing for change is easier said than done.

Petrol station tycoon picks poor time to exit Asda

29 Apr 2024

TDR may buy Zuber Issa’s 23% stake in the UK grocer, increasing its own holding. Since their 2021 deal Asda has repaid a big chunk of its debt, but market struggles mean it merits a lower multiple. The buyout shop’s consolation is it can drive a hard bargain on price.

Thoma Bravo UK cyber deal looks a little too good

26 Apr 2024

The buyout firm finally agreed a takeover of long-term target Darktrace, an IT security specialist. Despite the generous-looking 44% premium on offer, the buyer’s returns seem juicy given a nascent US push. That may raise the chance of shareholders asking for more money.

CVC’s Darwinian pay policy puts rivals on the spot

26 Apr 2024

The buyout shop, which manages $200 bln, allocates 40% of fund profits to staff on a deal-by-deal basis, rather than pooling the spoils. Rivals say it hurts teamwork, but CVC’s returns suggest it works. If the newly public firm keeps out-raising peers, others may follow suit.

Cruise-ship IPO bets the rich will always float

23 Apr 2024

Viking is seeking an $11 bln valuation in its US listing — a premium price relative to the larger Carnival and Royal Caribbean. As ballast, it offers a focus on high-end customers and less debt than peers. Investors will be reliant on the whims of the few, in more ways than one.

ValueAct’s reputation gamble in Japan pays off

23 Apr 2024

The U.S. fund prefers to chide companies in private but publicly lost its temper last year with Seven & i. Now the $34 bln owner of the 7-Eleven convenience outlet is spinning out its superstores. It vindicates an unusual move for ValueAct, though the financial reward is muted.

CVC insiders’ delayed payday is still pretty sweet

22 Apr 2024

The soon-to-list buyout shop will bar employees from selling stakes for three years, and then only let them do so slowly. It helps get IPO investors on board, and suits bosses too. By the time they cash out, CVC should be worth a lot more than its 13 to 15 bln euro float price.

Buyout barons salivate at Toshiba job cuts

22 Apr 2024

They extract world-beating returns from deals in Japan often without reducing staff because lifetime employment is the norm. Now the private equity-owned conglomerate may cut 5,000 roles. A tight labour market helps, but if layoffs catch on acquirors could both pay and earn more.

Paramount’s sale cries out for intervention

19 Apr 2024

Shari Redstone is mulling a deal for control of the $8 bln media company with unclear upside for other shareholders. The math can just work, but a bid from Apollo would offer a safer payday. The choice is clear, even if independent investors can do nothing but press their case.

Blackstone’s cash pile will buy only so much time

18 Apr 2024

The investment giant is reaching into its $200 bln war chest, but selling less. Higher-for-longer rates also threaten to slow down deals. A protracted mismatch would sharpen the divide between fund backers focused on profit and shareholders benefiting from capital deployment.

Telecom tycoon ensnared by his hefty debt machine

18 Apr 2024

Patrick Drahi built the ocean-spanning Altice empire on the back of aggressive dealmaking and $60 bln of borrowing. The bill is coming due with interest rates elevated. In this Viewsroom podcast, Breakingviews columnists discuss what comes next as bondholders get restless.