Kristian MacCarter

PE - Hedge Funds Hit by Lack of PE Exits (and one way that PE firms can boost exits) Financial Times: https://lnkd.in/edACss_X FYI - one way to get more PE exits is for the PE fund to have a domain expertise GTM and have deep knowledge on how to increase the Revenue Growth of portfolio companies which boosts cash, profits and margins. --- #pe #privateequity #business

24

4 Kommentare

Key Investment Highlights from The Seraphim Space Index Q2 2024 🌌 Let's take a closer look at the key highlights from the latest quarter: 💰 $8.5bn invested in TTM to Q2 2024 👩‍💻 174 deals in Q2 2024 🛰 $2.4bn invested in Q2 2024 🤝 385 deals in Q2 2024 compared to 320 in Q1 2024 🚀 Space Pioneer closed the biggest deal of $208m in Q2 2024 💲 Average deal size is $18m ◾ Median deal size is $5m in Q2 2024 Check out the full Index here - https://lnkd.in/d-vf-mVN

1

Very similar and a complement to Independent Sponsor led transactions targeting $15 million to $100 million plus EV, search fund deals target acquiring companies for around $15 million EV, priced at approximately seven (7x) times EBITDA or less. Over the years, companies tracked by Stanford have shown annualized equity returns exceeding 30%! The target universe for search funds and Independent Sponsors is substantial, with nearly 200,000 businesses valued between $10 million and $100 million, according to NAICS Association data. Search funds often seek out companies with retiring family founders looking for liquidity. Middle and lower-middle market financial sponsors generally avoid targeting companies worth $15 million due to high overhead costs and the need to deploy significant amounts of capital. However, for individual entrepreneurs, these micro-sized deals are not only accessible but also offer attractive bargains. This has led to the emergence of specialized search PE funds alongside Independent Sponsor transactions. Great article by the FT. #privatecapital #privatemarkets #privateequity #buyouts #growthequity #independentsponsor #searchfund #middlemarket #smallbuyout #sme #institutionalinvestor #alpha #moic #irr #privatecredit #privatedebt #familybusiness #founderowned #fT

26

2 Kommentare

“About every ten years we face some financial crisis or reckoning, during which around 20% of the GPs fail to re-raise another fund” per Bain & Co’s private equity practice. Investors are growing restless, and the increasing pressure to return their capital is creating a critical juncture for many general partners. Distributions, the return of capital to investors, are at their lowest in over a decade. Early data for 2024 suggests a bleak outlook, with the year on track to be the second-worst for exit value since 2016. Private equity's business model depends on a continuous cycle: raising money to make acquisitions, exiting via sales or initial public offerings, and then returning capital to investors. When one part of this cycle stalls, it risks disrupting the entire system. This situation is putting a strain on pension funds, endowments, and other investors, known as limited partners. Cash-strapped, these investors are hesitant to commit to future funds without seeing current returns. And at the SuperReturn conference more general partners attended than limited partners! #privateequity #privatecapital #privatemarkets #pe #vc #growthequity #institutionalinvestor #liquidity #sponsor #limitedpartner #generalpartner #superreturn #distribution #m&a #realization

36

3 Kommentare

PE Firm Differentiation - how LPs think about firms, funds & investors I saw a great insight on Twitter from Ho Nam which relates broadly to any investment firm including PE, hedge funds, etc.: Ho Nam posted: "Everyone sounds the same... the [Investors / GP] don’t see it themselves. But if you ask any LP which meets hundreds of managers a year, they will confirm. It’s hard to stand out from the crowd. [Investors / GPs] must think deeply about how to be different. It’s not just a pitch - to truly *be* different, you have to commit to a continual process that takes you down a different path." P.S. There are 8,000+ active global PE firms and only a couple of effective strategies to differentiate - some of them seem simple but are not easy. Example - GTM Edge, deep hands-on expertise in scaling sales & revenue growth. Seemingly simple for any PE fund, but not easy and far more nuanced than what meets the eye. --------- #pe #privateequity #lp #differentiation #business

29

2 Kommentare

As the Shasta Ventures approval deadline approaches, we're presented with a unique opportunity to observe the complexities and inherent conflicts in GP-led secondary transactions. This scenario sheds light on the considerable leverage GPs hold within the private equity infrastructure. According to the article, proposed continuation fund requires LPs to approve the transaction if they wish to roll their interests into the new structure—a stipulation that could be seen as putting undue pressure on LPs. This raises critical questions about the balance of power in private equity deals and the alignment of interests between GPs and LPs. What are your thoughts? Is it appropriate for GPs to demand such conditions for LPs to participate in a continuation fund? How do you see this impacting the broader private equity landscape and the perception of GP-led secondary transactions? Looking forward to hearing your insights and perspectives on this pivotal issue. #PrivateEquity #VentureCapital #InvestmentTrends #ShastaVentures #GPledSecondaries

3

2 Kommentare

#orion #Sweetwater_Royalties Orion Resource Partners, a global investment firm specialising in metals and materials, has sold an 8% minority interest in Sweetwater Royalties, a private industrial minerals royalty company, to a Canadian pension fund for $100m. The transaction implies an approximately $1.9bn enterprise value for 100% of Sweetwater Royalties, with Orion retaining a 67% majority ownership share in the asset, having sold a 25% stake to Ontario Teachers’ Pension Plan in March 2023 for approximately $220m. https://lnkd.in/gkKMP3Tr

4

In the complex world of corporate finance, #EBITDA is a key metric in evaluating a company's performance, yet it's also susceptible to manipulation, especially in M&A transactions. Uncover the risks, red flags, and preventive measures of EBITDA fraud in the A&M article linked below. #MergersandAquisitions #AlvarezandMarsal #Finance

23

Private markets fund managers and limited partners across the globe are no doubt enamored by the fundraising powers of Andreessen Horowitz as limited partners, particularly sovereign wealth funds, insurance companies and others with large minimums are lining up to make commitments and access the various strategies across the Andreessen Horowitz alternative asset supermarket which include #seed, #growth, #crypto, #gaming, #digital #bio, and now raising a private equity fund! I am not sure of the financial #returns of the strategies, but I am sure this private equity fund will be well-received by limited partners (especially #middleeast and #asiapacific) and that will continue the capital flows into the firm's other strategies and overall platform, which are often highly #oversubscribed and are able to charge premium management fees (ie higher than 2% annually) as well as tiered #carriedinterest ie 25% and above for higher than 2.0X/2.5X net performance. #fundraising #alternativeassets #privateequity #a16z #privatemarkets #venturecapital #capitalmarkets #sovereignwealthfunds #insurancecompanies #pensionfunds https://lnkd.in/g8ZaBHiY

46

1 Kommentar

EY forecasts a return to pre-pandemic M&A levels in 2024, with a 20% surge in corporate deals and a 16% rise in private equity activity. Q1 boasted a 36% spike in global deal value. Looking ahead, EY predicts continued strength in M&A through 2025. Read More Here: https://lnkd.in/euSnakMZ #innovation #venturecapital #technology #socialnetworking Branded Hospitality Ventures Ben P. Z Mary Broccoli Ann Liberman Paulo Spencer Uebel, CP3P-F Raj Ramani John Woodby Patrick Grismer Élie Girard Rick Pleczko Jon Ziglar

3

1 Kommentar

James Carey, currently a partner at Next Sparc Growth Partners, provides insights into how family offices excel in strategic acquisitions within the competitive realm of mergers and acquisitions. Family offices distinguish themselves through their flexibility, personal touch, and creativity in deal-making, leveraging their own capital to structure deals with agility. Carey emphasizes that relationships with founders and entrepreneurs are pivotal in deal sourcing, underscoring the importance of trust and value creation in successful transactions. Key strategies include proactive deal sourcing through extensive networks and collaboration with top-tier firms, swift decision-making guided by experience and intuition, and rigorous due diligence based on strong rapport with sellers. Success stories range from explosive growth in minority investments to strategic exits that define success, highlighting the integral role of industry experts and operating executives throughout the M&A process. Read More Here: https://lnkd.in/gFfbGZwD Branded Hospitality Ventures Matthew Lerner #hospitality #innovation #venturecapital #MandA Noah Stern Miles Molyneaux Nathan Carmon Len Pagon

5

1 Kommentar

I had an interesting chat with Yuke Xie from the South China Morning Post SCMP recently on the evolving investment strategies of Middle Eastern institutions and family offices.    Traditionally centered on the US and Europe, these investors and institutions are now turning their attention to the dynamic economies of #SoutheastAsia.    Looking forward, I foresee Southeast Asia maturing significantly as an investment hub, driven by its vibrant entrepreneurial ecosystem and fast-growing middle class. I believe Southeast Asia could well become a third pillar of international diversification for Middle Eastern investment, and #healthcare could potentially be a focal point.    Exciting times lie ahead for our SEA team of investment professional & operators, and we are currently raising a Southeast Asia-focused healthcare growth capital fund to capitalize on this growth.   Read more about it in the following link:

39

Great article by Kjartan on "Family Offices & Venture Capital: The shift from direct investments to partner funds" 👇🙌 🙌 🙌 This aligns well with my worldview. An additional challenge for FO direct investment is access (or lack thereof) to the right opportunities with the underlying power law dynamics and return asymmetries (I believe). https://lnkd.in/dzh_dd6t

30

2 Kommentare

PE Value Creation - what research / data show Key Drivers of "Total Enterprise Value" Creation: a) Revenue Growth - 45% & b) Margin Expansion - 20% Source: Partners Capital & Bain & Company / Hugh MacArthur #pe #privateequity #business #finance #investing #ceo #valuecreation #pei

82

5 Kommentare

PE & More Exits I see significant potential in this area - it's important for PE firms to drive tangible value creation and capital-efficient, high-ROI operational improvements that enhance Equity Value and pave the way for successful exits. The #1 example of such value creation: Profitable Revenue Growth (which affects disproportionate EBITDA growth) ------------------ #business #pe #privateequity #ceo #cro #growth

31

1 Kommentar

Over 27,000 private equity portfolio companies lining up for PE exits globally, an uptick in sell side preparation behind the scenes, stable interest rates and c.$2 trillion of debt to be refinanced in 2024 should mark a rebound of M&A activity. Some roadblocks remain due to valuation gaps and elections in three major economies this year... Firepower added by SWFs, the return of banks into the M&A financing arena and tapping of 'retail channels' is changing the deal dynamics for PE funds i.e. investment models should look to Transform the Business. Energy transition and infrastructure are the sectors in focus, while India and Japan markets stand out with demand for private capital Exciting times ahead! Read more in our Mid Year Outlook on Global M&A Trends in Private Capital https://lnkd.in/dAXfaCEr

33

#Family_offices Family offices in North America allocate 35% of the average portfolio to private equity, the highest regionally, according to the UBS Global Family Office Report 2024.  In its latest report, UBS surveyed 320 single-family offices globally with an average net worth of $2.6bn and covering over $600bn of wealth.  By region, family offices in North America allocate 35% of the average portfolio to private equity and 8% for hedge funds; in Latin America, 18% and 2%; in Switzerland, 18% and 3%; in the rest of Europe, 22% and 4%; in the Middle East, 27% and 5%; in North Asia, 18% and 6%; and in Southeast Asia, 19% and 5%. https://lnkd.in/gYA_BMuG

7

Venture capital and private equity can appear opaque. In our fall course (https://lnkd.in/e6wzFs6J), Archie L. Jones, Jr., CPA, NACD.DC and I again will attempt to de-mystify them. To that end, Christina Wallace and I have written a new Technical Note: "Venture Capital and Private Equity Funds: A Primer" (https://lnkd.in/edTPwGbe). It covers the "when, who, and how" details of how funds work: - "When": fund length, extensions, and when investors can no longer initiate new investments. - "Who": who is in the General Partner entity, the importance of the firm's Management Company (the owners of the firm), how fees and carried interest flows work, and the Limited Partners' Advisory Committee. - "How": key person clauses, invested capital vs, committed capital, what happens when an investor defaults on its commitment, how multiples are calculated (MOIC vs. TVPI), the difference between realized and unrealized gains/losses, how fund distributions work, and the difference between distributed and residual value. We look forward to seeing Harvard Business School's Class of 2025 in September! #hbsvcpe #harvardbusinessschool

46

6 Kommentare

IPO market insiders, while cautious, are optimistic that the current trickle of companies going public will pick up steam. I recently shared some additional thoughts on this trend with Crunchbase. https://lnkd.in/gh75AxcU #ipo #ai #startups

63

1 Kommentar