H/Advisors Private Capital Wrap-Up 23rd August 2024
WORTH A READ?
Europe?
Bloomberg reports that while publicly downplaying concerns, private equity firms are intensely lobbying the UK’s new Labour government behind the scenes to maintain the preferential tax treatment of carried interest and prevent it from being taxed as income rather than capital gains. The industry faces challenges in making its case due to economic pressures and a potentially unsympathetic Labour government, with some executives privately acknowledging that changes to the current tax perks may be inevitable.?
There is a growing trend of private equity investments in the accounting industry, particularly focusing on small tax and accounting firms, writes Thompson Reuters. The article highlights how PE investments can provide small firms with access to capital, operational expertise, and enhanced competitive positioning, potentially levelling the playing field with larger firms. While acknowledging potential challenges such as pressure for rapid growth and cultural clashes, the article suggests that the benefits of PE investment may outweigh the drawbacks for many small accounting firms.?
Foresight Group, a FTSE 250 asset manager specialising in sustainable infrastructure, is calling for regulatory support and long-term contracted revenue to attract private capital to support a ￡350 million project through its Infra fund to transform the disused Glenmuckloch coalmine into a pumped storage hydro power station. The Times notes how this highlights the need for policy mechanisms to support such crucial green energy initiatives. The project aims to address grid constraints and balance renewable energy supply, potentially powering 210,000 homes for eight hours.?
United States?
Lawmakers in California are currently debating legislation that would give the state the ability to block private equity takeovers of health care institutions and providers. According to Axios’s Maya Goldman, the legislation is the latest example of states trying to regulate deals as critics have linked PE acquisitions of health care facilities to staffing shortages and insufficient patient care. Ropes & Gray confirmed that California is one of many states attempting to pass legislation of this kind, and 11 states already have some level of state review over PE and health care deals, including Oregon, Illinois and New York.??
In contrast with their corporate counterparts, private equity executives are optimistic about dealmaking prospects for the year ahead. According to a June KPMG survey, 60% of 50 deal professionals at PE funds said they expect to be involved in at least one transformative transaction in 2024, or in other words, ones that “change the very nature and operations of a company.” In comparison, only about 33% of the 150 surveyed corporate dealmakers expect the same in the year ahead. The article noted that private equity funds have excess capital and quoted Glenn Mincey, U.S. head of private equity at KPMG, who said, “PE firms have held a surplus of assets for longer than they anticipated, and many will need to sell those assets soon to fund returns to their investors.”?
Private equity firms are increasingly engaging in large-scale deals, known as "megadeals" worth $5 billion or more, to deploy their substantial unused capital, estimated at $2.6 trillion. Private Equity News details that in 2024, 13 such deals totaling $123.6 billion have been tracked so far, putting the year on course to potentially surpass the 22-year high set in 2021. This trend is driven by stabilizing interest rates and the need for PE firms to put their money to work, with notable transactions including Silver Lake's $21 billion acquisition of Endeavor Group Holdings.?
WALL OF MONEY???
HarbourVest Partners has closed its eleventh dedicated private equity secondaries fund (Dover Street XI), at its hard cap of $15.1bn. The firm has also held a final close for Secondary Overflow Fund V, at $3.4bn for secondary co-investment opportunities.?
BlackRock has reached a $1.3 billion first close on its new high-yield infrastructure debt fund, raising over half the capital being sought. The group launched Global Infrastructure Debt II at the beginning of the year with a $2.5 billion target.??
领英推荐
Bain Capital-backed 360 ONE, one of India’s largest wealth firms, has raised $500 million for its debut secondary fund, according to Sameer Nath, chief investment officer and head of venture capital and private equity at its asset management business.?
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DEAL CHART???
MEDIA OF THE WEEK??
In this episode of the M&A Science Podcast, Court Carruthers, President and CEO at TricorBraun, shares his insights on how to successfully integrate two cultures and build a stronger, unified organisation.?
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MOVERS AND SHAKERS??
Houlihan Lokey has hired a former CVC director in its general partner (GP) advisory team. PJ Heyer has joined the US-headquartered investment bank as a director based in New York following a two-year stint at buyout giant CVC.?
Verdane has welcomed Carl Nauckhoff as a partner and chief commercial officer to support the firm’s IR and public relations teams, based in London.?
The Canada Pension Plan Investment Board has promoted Caitlin Gubbels, its managing director and head of private equity funds, to senior managing director and global head of private equity, effective 15 October.??
GoldenTree Asset Management, which manages approximately $55 billion in AUM, has named Avineet Punhani as principal. Punhani joins GoldenTree from PNC Financial Services, where he served as a managing director.?
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FROM THE HORSES MOUTH????
[On carried interest] “I don’t say this lightly: in 30 years of campaigning, I’ve never seen financial lobbying having so much influence on government policy,” – Mick McAteer, co-director of the Financial Inclusion Centre?
“We’ve already seen dealmakers get comfortable with the ‘new normal’ of elevated interest rates and consistent uncertainty. But when that new normal tips more to the positive, there’s a potential for activity to take off.” – Carole Streicher, head of deal advisory and strategy for KPMG US.?
“For me, I'm focused on what I want to do. I know what I need to do to be a champion, so I'm working on it.” – Usain Bolt, the fastest man in history, born 21st August 1986. ?