Life goes on
For an industry traditionally reliant on personal relationships and face to face meetings, you might have assumed that adapting to the “new normal” of remote working and communicating via video conferencing would have been a challenge for private fund managers. Not so. For the large listed firms at least, the transition has been seamless.
The Blackstone Group Inc. and Apollo Global Management Inc. have both met with limited partners via video conference. “Everybody was pretty adjusted and cool about it,” Blackstone CEO Steve Schwarzman said of his firm’s 150 person-strong Zoom due diligence call.
Along with KKR & Co. Inc., the alternative asset giants have closed on billions of commitments from their LPs since the coronavirus outbreak without a boarding pass, checked bag or accrued air mile in sight.
For these firms, who have “created chemistry,” in the words of Apollo CEO Leon Black, investor appetite for funds remains strong. But for the smaller firms, or those without 30-year relationships with possible investors, circumstances will be a little more challenging. It would be “really almost impossible” for a first-time fund manager to close on a commitment via video conference, Schwarzman said, adding that the “bond of trust” developed over decades becomes “exceptionally useful in a situation like this.”
Blackstone is cautiously optimistic that fundraising will remain “healthy” this year, although it does expect activity will slow down, the firm’s COO said. Managers elsewhere also anticipate it will take much longer as LPs carry out due diligence remotely and work through their portfolios to consider the denominator effect — the potential to be overexposed to alternative assets as a result of the slump in public markets.
But for now, at least for the listed giants who continue to attract huge LP commitments, “life goes on,” Schwarzman said.
Activity in the private equity secondaries market is at a standstill as buyers and sellers look for more clarity around valuations, but discussions around “exciting” future opportunities are underway. Read more about where, and how, these may present themselves over the coming months here.
* Apollo is in talks with prospective investors to raise $2 billion to $3 billion for its second infrastructure fund, Apollo Infrastructure Opportunities Fund II LP, Bloomberg News reported, citing people with knowledge of the matter.
* BlackRock Real Assets secured approximately €1.29 billion for its Europe Property Fund V at the final close. The fund also attracted an additional €200 million of commitments for co-investments, taking the total to roughly €1.49 billion for the strategy.
* Oberland Capital Management LLC attracted $1.05 billion at the close of Oberland Capital Healthcare Solutions Fund and affiliated funds.
* Capitalworks Investment Partners (Pty) Ltd. pulled in 5 billion South African rand for its Private Equity Fund III, 25% more than planned for the fund, Bloomberg News reported, citing the Johannesburg-based firm’s founder Chad Smart.
* CVC Capital Partners Ltd. is in talks to buy up to a 20% stake in Italian soccer league Serie A for approximately €2 billion, Bloomberg News reported, citing people with knowledge of the matter.
* Blackstone is also considering to make a potential investment in Serie A football league clubs, London’s Financial Times reported, citing people familiar with the proposal.
* TowerBrook Capital Partners LP is seeking to buy a majority stake in travel software firm ETrawler Unlimited Co., or CarTrawler, with a potential capital injection of more than €100 million in the Irish company, Sky News reported May 6, citing sources. BC Partners, the majority stakeholder of ETrawler, is expected to exit its investment if the deal closes.
* Adamantem Capital is in talks to acquire laundry firm Spotless Group Holdings Ltd. from Downer EDI Ltd., The Australian Financial Review reported.
Heading for the exit
* Bain Capital LP is planning to hand over its two-thirds stake in Atento SA to creditors after a share-price collapse shrunk the call center company’s value, Bloomberg News reported May 6, citing sources.
* Abu Dhabi Developmental Holding Co. PJSC is close to acquiring a majority stake in Jordan-based Al-Nabil Food Industries Co. Ltd. from Carlyle Group Inc., Bloomberg News reported, citing anonymous people with knowledge of the matter.
* Clayton Dubilier & Rice LLC closed the £575 million acquisition of healthcare communications and public relations group Huntsworth PLC.
* AAVIN Private Equity Advisors and Konkordia Capital LLC closed the purchase of Phoenix Loss Control Inc., which aids utility, cable and telecommunications companies in recovering the costs of repairing damage to outside facilities and replacing damaged infrastructure.
* Sole Source Capital LLC, which invests in North American lower-middle-market companies, acquired Supply Chain Services LLC, which provides automatic identification and data capture and factory automation solutions to customers across North America.
* DFW Capital Partners closed an investment in IntelliSite Corp., a company that provides advanced surveillance and monitoring solutions, safety and security, computer vision services, and internet of things to its customers.
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