Centerstone Capital

Interesting thoughts on Pepsi's nearly $2B acquisition of Poppi from our friend Drew Fallon. https://lnkd.in/gtFVj6gp

Interesting write up on Allbirds and where they currently are by our friend Drew Fallon.

RESILIENCE? Industry leaders and visionaries gathered for an inspiring discussion on resilience in business, hosted by the Centerstone Capital team—Arash Farin, Jay Liebowitz, and Vishaal K.—alongside Jean Huang and Steven Summerhays of Bernstein Private Wealth Management.?The group delivered true stories, highlighting the loyalty, perseverance and grit it takes to build success and achieve! ? Guest Speakers Ajay James and Cary Hawkins ? Attendees Founders and leaders from Beautyblender, The Jim Henson Company, HexClad Cookware, NativePath, Primary Care Associates of California, and Upstaging, Inc. Inc.as well as prominent M&A attorney Christine Shin Shin of Russ, August & Kabat and Metta World Peace.

Intereting report on the state of private equity from Bain Capital. As reported by our friends at Transacted: Bain & Company released its annual private equity report, which arrives with an unpleasant statistic: Private equity assets under management fell to $4.7 trillion as of mid-2024, down 2 percent from the prior year in the first contraction since Bain began tracking the data in 2005 (which, of course, includes the 2008 financial crisis). Distributions from buyout funds as a percentage of net asset value fell to 11 percent in 2024, less than half the historical average and the lowest level in over a decade. The resulting lack of liquidity hit limited partners, who pulled back on new commitments to avoid overallocating. In all, private capital fundraising dropped 23 percent to $401 billion in 2024, below the $468 billion outflow from the year's exits. "It won't all be better in 2025," warns Hugh MacArthur, chair of Bain's global private equity practice, speaking to the Financial Times. "It's a three- or four-year problem." Buyout funds now hold almost twice the assets they did in 2019, while annual exit values remain largely unchanged. The data also shows why portfolio liquidity solutions have been in the headlines this year. Nearly a third of portfolio companies have undergone partial liquidity events, including the sale of minority stakes, dividend recapitalizations, secondaries, and NAV loans. For the 2019 vintage, the last with a five-year record, full exits account for only 20 percent of total realizations, down from the 44 percent average seen in the 2014-2016 vintages. It's similar to the pattern seen coming out of the global financial crisis. Rapid pre-crisis AUM growth, followed by an exit slowdown and negative distribution-to-contribution ratios, caused AUM growth to stall for eight years before recovering its upward trajectory. This time, Covid-era funds from 2020-2022 are leading the way. After unusually rapid initial drawdowns during the height of the market, followed by the interest rate-induced exit slowdown, their J-curves now resemble the 2005-06 fund vintages launched just before the financial crisis. On average, those funds took over nine years to return capital. For the capital that is still flowing into new funds, consolidation among top performers has become even more pronounced.?The top 10 funds took 36 percent of all capital raised in 2024, with 40 percent flowing to funds raising $5 billion or more. Despite the choppy conditions, buyout funds do still outperform public markets across time horizons longer than five years. But the trend has weakened, with 10-year returns falling 3 percentage points in North America, while public markets enjoyed a particularly strong 2024.

Great article on Amazon’s continued efforts to disrupt retail and bring more brands on its platform. https://lnkd.in/geQKJv4c

Giving Back The Centerstone Capital team on display, showing some resilience and community spirit. Despite many of our team members being impacted by the recent wildfires, Arash Farin, Jay Liebowitz and Vishaal K. still made time to volunteer at the LA Food Bank, helping to provide meals to families in need. In times like these, we’re reminded that giving back isn’t just something we do—it’s who we are. A huge thank you to our team for their dedication and to the Los Angeles Regional Food Bank for the incredible work they do every day! #CommunityStrong #CenterstoneCares #LAFoodBank #GivingBack

Below are a few charts showing a bounce back in recent private equity activity in terms of new deals completed, exits, average multiples, and dry powder. Overall, the environment seems to remain robust, although not at the levels we saw in 2021, which were propelled by ultra-low interest rates, cryptomania, SPACs, and related phenomena.

Great article on the rise of private credit, how regulators view the industry, and how banks are reacting. https://lnkd.in/gjeaPvN4

Wishing everyone a wonderful holiday season and a great 2025. We are so honored to work with our incredible entrepreneur and founder clients, as well as our partners in the family office and private equity community, to help them achieve their goals. We expect 2025 to be a very active year and look forward to what we will bring to market this year! In the meantime we hope everyone can enjoy this special time with friends and family.

L Catterton: Finding Value in a Tough Market