Newsletter 21st March
Raw Selection
De-risking executive search for your Private Equity firm and Portfolio Companies
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What is going on in the Private Equity world this week?
Deerpath closes sixth credit fund
Deerpath Capital Management attracted more than than $2.8 billion in capital commitments for its sixth private credit fund, according to a report by Reuters. The fund will finance healthcare, IT, and business services companies with enterprise values between $50 million and $150 million.
Fundraising for the fund began in September 2021 with the final close being held on 1 February. Backers include asset managers, private insurance companies, and both public and private pension funds from around the world.
Deerpath's previous fund, which closed in 2021, raised more than $2 billion in 2021, according to a company spokesperson, who also confirmed that the lender is planning to commence fundraising for a seventh fund in the second quarter of this year.
Founded in 2007, Deerpath has about $6 billion in assets under management.
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Petronas planning $200m VC arm expansion
Petronas, Malaysia's state-owned oil company, is planning to expand its corporate venture capital arm by up to $200 million with the extra funding set to be in place as early as April, according to a report by Reuters.
Two unnamed Reuters sources have revealed that the new funding will be focused on innovation and technology investments across Asia-Pacific, although the plan has yet to be finalized and details may change.
Petronas responded to a request from Reuters for confirmation by saying that it "plans to allocate additional funds to Petronas Ventures, increasing the size of its venture capital arm from the $350 million previously announced in 2019", but did not say by how much.
The state oil company first set up a venture capital arm called Petronas Corporate Venture Capital in 2019, which was subsequently renamed Petronas Ventures and, according to its website, has since invested in companies including Malaysian agriculture technology startup Brantree Technologies and USbased waste-to-energy company Ekamor.
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EQT in talks over data center operator deal
Private equity firm EQT has entered into talks over a deal to acquire UK-based data center operator Global Switch, which is controlled by Chinese steelmaker Jiangsu Shagang group, according to a report by Reuters, citing unnamed sources.
The sales process for Global Switch is first underway in mid-2022, but according to Reuters' sources, a discrepancy over valuation between potential acquirers and the company's shareholders has prevented progress from being made.
Global Switch had expected a sale to value it at around $10 billion but final bidders, which included PAG and KKR as well as EQT, had valued the company at around $8 billion including debt, Reuters reported in December.
EQT remains interested in exploring a deal but there is no certainty the two sides will reach an agreement.
Private Equity in Healthcare continues to grow
Private equity firms consider the healthcare industry to be a compelling investment opportunity for several reasons. Firstly, healthcare is a fundamental need, and the demand for healthcare services is relatively stable, regardless of economic conditions. This characteristic makes the healthcare industry more resistant to economic downturns, which is an attractive feature for investors seeking stable investments.
Secondly, the healthcare industry has significant growth potential due to factors such as an aging population, increased prevalence of chronic diseases, and advances in medical technology. These trends are driving demand for healthcare services and creating opportunities for innovation and growth within the industry.
Thirdly, the healthcare industry is highly fragmented, with many small players in various niches. This fragmentation creates opportunities for private equity firms to acquire and consolidate these smaller players, creating larger, more efficient healthcare companies. By consolidating and streamlining operations, private equity firms can create value and improve profitability.
Fourthly, the healthcare industry is heavily regulated, which can create barriers to entry for new competitors. However, private equity firms with expertise in navigating regulatory frameworks can use this to their advantage and invest in companies that have already established compliance. This can help private equity firms to reduce risk and increase their chances of success in the healthcare industry.
Finally, private equity firms are attracted to the healthcare industry because of the potential for attractive financial returns. By making operational improvements, strategic acquisitions, and cost-cutting measures, private equity firms can create value and increase profitability within their portfolio companies.
In summary, private equity firms view the healthcare industry as a promising investment opportunity due to its stability, growth potential, opportunities for consolidation, favorable regulatory environment, and potential for attractive financial returns.
Key takeaways:
In a panel discussion at the University of Pennsylvania’s Leonard Davis Institute of Health Economics,?Rachel M. Werner, MD, PhD,?executive director at the institute, said the number of private equity deals in health care has increased from 325 in 2010 to more than 1,000 in 2021.
The Private Equity channel and Podcast?houses our podcast recordings, PE and Portfolio advice, plus recent case studies conducted on new talent and their firm
We keep you updated on our latest podcast stars and the hot topics of Private Equity.?You can watch our podcast recordings over on our YouTube channel or tune in?on Spotify, Apple Podcasts,?and Google podcasts.
Keep?informed about what we are doing?through our LinkedIn page or change your thinking by getting stuck into an advice episode on the Private Equity channel, hosted by Alex Rawlings.?
领英推荐
In this episode, we welcome Salvatore Buscemi?to The Private Equity Podcast. He is the CEO and co-founder of Dandrew Partners - a private family investment office that has managed money successfully for almost 20 years by creating multiple portfolios on various cross-asset platforms. Sal is a frequent speaker and guest lecturer on real estate finance at professional symposia. He has written numerous books and articles on real estate and private equity finance in various publications, including Investor's Business Daily and Forbes, and on television shows such as CBS New York and Good Morning LaLa Land.
What You Will Learn:
??Ways VC Firms Can Improve Their Portfolio Company's Brand Awareness
??What to Expect From Silicon Valley Bank's Abrupt Closure
??How the .001% of People Invest
Catch up on the links below to tune in...
We are always looking for people in the Private Equity space who have great conversations, can provide an interesting perspective, and are on top of their game.
If this sounds like you, give Alex Rawlings our podcast host, a message either on LinkedIn or drop him an email at [email protected]
PRIVATE EQUITY: ADDRESSING AND TACKLING THE NEGATIVE CONNOTATIONS
Private equity is a topic, still to this day, of controversy. Some people view the industry as a means of generating wealth and creating jobs, while others believe that private equity firms strip companies of their assets and lay off employees. These negative perceptions can be detrimental to the industry, but there are ways in which private equity firms can shake off these connotations and demonstrate their value.
How does Private Equity shake off the negative connotations that it has?
Private equity is a topic, still to this day, of controversy. Some people view the industry as a means of generating wealth and creating jobs, while others believe that private equity firms strip companies of their assets and lay off employees. These negative perceptions can be detrimental to the industry, but there are ways in which private equity firms can shake off these connotations and demonstrate their value.
Negativity Surrounding Private Equity Firms
The negative connotations associated with private equity are primarily attributed to several factors.
1) private equity firms are known for their cost-cutting strategies, which often lead to job losses.
2) Firms often use a significant amount of debt to finance their acquisitions, which can lead to high levels of leverage and increase the vulnerability of companies to economic downturns or unexpected challenges.
3) Private equity firms operate with a high degree of secrecy, which can create distrust and suspicion among the public. Fourth, private equity firms are often focused on short-term results, which can result in decisions that prioritize immediate gains over long-term sustainability.
4) Private equity firms are known for their financial engineering skills, which can be seen as unethical by some.
Removing The Stigma
To shake off these negative connotations, private equity firms can adopt several strategies.
?First, educating the public about their investment strategies and the positive impact they can have on companies and the economy can help to combat negative perceptions. Firms can also highlight the positive aspects of their investments, such as the creation of new jobs and the growth of companies. Private equity firms should be transparent about their investment strategies and how they operate. This can help to build trust with the public and demonstrate that they have nothing to hide. It is also crucial that firms always act ethically and with integrity by following all laws and regulations, treating employees fairly, and being upfront with investors and the public. Finally, engaging with stakeholders, including employees, customers, and the wider community, can help to demonstrate the positive impact of private equity investments and build support for the industry.
In conclusion, private equity remains a controversial topic due to the negative connotations associated with it. However, there are ways in which private equity firms can shake off these connotations and demonstrate their value by educating the public, highlighting the positive aspects of their investments, being transparent, acting ethically, and engaging with stakeholders. By doing so, private equity firms can build trust with the public, demonstrate their positive impact on the economy, and create a more positive image for the industry as a whole.
How We Can Help
This is easily said and hard to implement. However, at Raw Selection, it’s our mission to provide you with the best talent, advice, and support possible. We want your employee and company to thrive and have delivered top results time and time again.
Ensuring you have the right talent and leaders is of course critical and if this is a concern, then drop me a note at [email protected] we specialise in Private Equity professionals and PE-Backed C-Suite searches. We know what high performers look like. We are so confident in our approach, that we offer a money-back guarantee on all retained searches.
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We specialize in executive search, working exclusively with lower and middle-market Private Equity firms and their Portfolio Companies across Europe and North America.
We support Private Equity firms to secure talent for their investment and operations teams and to identify proven senior executives for their Portfolio Companies.
When it comes to recruiting senior executive talent for your business, our approach is one of meticulous search and due diligence.
So much so, we de-risk recruitment for all our retained clients. We are so confident in our approach that we are prepared to offer a money-back guarantee on our services.
Interested? Get in contact here: Alex RAWlings
Every week we upload new training videos to our YouTube channel hosted by Alex Rawlings and the team here at Raw Selection.
Every episode is unique and covers both professional and personal development since we think that if you are not prospering on all fronts, it is impossible to be truly successful in life.
Therefore, we record our training each week to show you how we advance both personally and professionally and to provide you with advice on how to accomplish the same.
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