PE fundraising's rough race into 2023

Tracking public fintech valuations; Ireland leads Europe's PE deal growth; Ballmers back Black fund managers; Shell circles PE-backed Nature Energy

Read online | Don't want to receive these emails? Manage your subscription. Log in The Daily Pitch: VC, PE and M&A October 20, 2022 The Daily Pitch is powered by PitchBook's industry-defining research and best-in-class data We're updating how we send email. Look for our new news-noreply@news.pitchbook.com address, and add us to your safe senders list. Check out our FAQ for details.   In today's Daily Pitch, you'll find: PE fundraising is weathering a tough year, and that environment is expected to continue in 2023. How private valuations for fintech companies might fare, based on the performance of their public counterparts. Ireland saw rapid growth in PE deal activity over the last five years.   Today's Top Stories   Private equity fundraising challenges set up a tough 2023 (FocusDzign/Shutterstock) As fundraising challenges cloud the private equity market, managers seeking new capital are expected to see an even tougher year in 2023. These additional challenges could confront private equity managers across almost all fund sizes and strategies, several industry participants said. As a result, firms could take longer to reach the fundraising finish line. read more   Share: Public fintech valuations remain far off their highs Many of the recent traditional IPOs and deSPAC transactions have not resulted in as big a payday as expected for late-stage fintech investors, as stocks of fast-growth, low-profit companies in the sector are 60% to 80% off their peak. Our analysts believe a challenged IPO market with lower valuations means that executing an IPO will be more difficult and valuations will be lower, at least in the short term. The trend could affect the performance of certain growth equity and late-stage VC funds. Our Fintech Q3 Public Company Valuation Guide tracks stock performance, revenue forecasts and market caps of key publicly traded fintech companies in sectors including payments, insurtech and property tech. see the data   Share:   A message from SS&C Intralinks   Report from the front lines: GPs and LPs speak out on new strategies for PE The pandemic transformed every aspect of private equity—from rapidly changing market opportunities and targets to processes like fundraising, investor onboarding, reporting and portfolio management. Download Intralinks' new report, Forging New Paths in Private Equity Investing, produced in association with Private Equity Wire, for the results of a recent focus group with senior executives from top PE firms across the spectrum of private asset classes. Get insights on: Why LPs are focusing on "re-ups" rather than new strategies Investor sentiment on building new manager relationships The emergence of deeper due diligence processes Changes to onboarding significance and processes ESG and sustainability concerns Download this new report to map out a better private equity strategy. Share:   Ireland sees Europe's fastest PE deal growth (BUTENKOV ALEKSEI/Shutterstock) Ireland saw the most growth in PE deal activity among European countries over the last five years. While the country still only accounts for a relatively small share of overall deal activity—147 deals were recorded in 2021—it has seen fast growth. Between 2016 and 2021, annual deal activity in Ireland grew by an average of 30.3%. read more   Share: Large-scale investors flock to venture debt's 'phenomenal returns' (eamesBot/Shutterstock) Venture debt was a small, poorly understood asset class a decade ago. But as startups have grown, so have their borrowing needs. Large asset managers and private equity firms have been piling into venture debt in recent years, drawn to the asset class's surprisingly lucrative returns and relatively low risk. However, venture debt's unique characteristics make it difficult for newcomers with traditional credit experience to transition to lending to unprofitable startups. read more   Share: Recommended Reads Are private equity firms ditching the leverage in leveraged buyouts? [Bloomberg] Will the energy crisis crush European industry? [Financial Times] Why Wellington Management is investing heavily into making itself a viable home for rising alternatives managers. [Institutional Investor]   Since yesterday, the PitchBook Platform added: 463 Deals 1953 People 421 Companies 7 Funds See what our data software can do   Quick Takes     The Daily Benchmark     2016 Vintage Global Funds-of-Funds     VC Deals     Orionis Biosciences brings home $55M     PIC Therapeutics raises $35M     Nourish Ingredients bulks up with $28M+     Credit Key unlocks $15M for B2B BNPL     PE Deals     H&F, KKR-backed Cordis lines up $1B+ deal     Shell among bidders for PE-backed Nature Energy     Mubadala scoop ups snack food manufacturer     Oaktree, Ara's Priority Power acquires energy consultancy     Snow Peak lands two fabric manufacturers     Odyssey to pick up Magna Legal     Fundraising     Vertex Ventures seeks $500M for China-focused fund     Seven Point closes $120M continuation fund     Investors     Steve and Connie Ballmer back VC, PE firms with Black managers       The Daily Benchmark   2016 Vintage Global Funds-of-Funds Median IRR 23.55% Top Quartile IRR 32.48% 1.89x Median TVPI Select top performers Weathergage Capital Investments 2016 SVB Strategic Investors Fund VIII Fairview Private Markets Fund IV *IRR: net of fees 39 Funds in Benchmark » Check out the latest version of PitchBook Benchmarks   VC Deals   Orionis Biosciences brings home $55M Orionis Biosciences has raised $55 million from investors including Cormorant Asset Management and Novartis. The medtech company will use the funding to advance its lead cancer immunotherapies through clinical trials. View round   View similar company »   PIC Therapeutics raises $35M PIC Therapeutics, a drug discovery company developing medicines for cancer treatment, has raised a $35 million Series A led by OrbiMed, with participation from Lumira Ventures and Harrington Discovery Institute, among others. View round   View similar company »   Nourish Ingredients bulks up with $28M+ Nourish Ingredients has raised a $28.6 million Series A led by Horizons Ventures, TechCrunch reported. The Australian startup uses synthetic biology to develop animal-free fats. View round View similar company » Credit Key unlocks $15M for B2B BNPL Credit Key, a buy now, pay later specialist targeting B2B companies, has raised $15 million from existing investors RedBird Capital, Bonfire Ventures and Greycroft, Axios reported. The company also secured a $100 million debt facility from Fortress Investment Group. View round   View 8 competitors »     PitchBook webinar: US leveraged loan market outlook With rising rates, distress and volatility, the leveraged loan market is currently facing significant instability and wariness from investors. Join our experts from LCD as they explore market trends, CLOs and the potential role of PE in this environment and answer your questions about the future of leveraged loans. Register now to secure your spot. Share:   PE Deals   H&F, KKR-backed Cordis lines up $1B+ deal Medical device developer and manufacturer Cordis has agreed to acquire Switzerland-based MedAlliance. Cordis will pay $235 million up front, with an additional $900 million dependent on performance milestones. Hellman & Friedman and KKR acquired Cordis in 2021, the same year that Trustar Capital invested $50 million into MedAlliance. View deal   View similar company »   Shell among bidders for PE-backed Nature Energy Shell is among companies bidding to acquire Nature Energy, a Danish renewable natural gas specialist, in a deal that could value the company around $2 billion, Reuters reported. Nature Energy's backers, Pioneer Point Partners, Davidson Kempner and Sampension, bought the company in 2018. View details   View similar company »   Mubadala scoop ups snack food manufacturer Mubadala has acquired Pittsburgh-based TruFood Manufacturing from majority owner AUA Private Equity Partners. TruFood produces private label and branded snacks like nutrition bars and baked goods. View deal   View 12 competitors »   Oaktree, Ara's Priority Power acquires energy consultancy Ara Partners- and Oaktree Capital Management-backed Priority Power Management has acquired Austin-based AB Power Advisors, an energy consulting firm that focuses on the Electric Reliability Council of Texas market. The deal marks Priority Power's third acquisition in 18 months. View details   View 5 competitors »   Snow Peak lands two fabric manufacturers Snow Peak Capital has acquired two nonwoven fabric manufacturing companies in the Carolinas: Dalco Nonwovens and Global Felt Technologies. Joey Duncan, CEO of both companies, retained minority stakes in Dalco and GFT. View details   View 1 investments »   Odyssey to pick up Magna Legal Odyssey Investment Partners has agreed to purchase Magna Legal Services from CIVC Partners. The Philadelphia-based company, which provides its legal industry clients with litigation support, has made six add-on acquisitions since it was acquired by CIVC in 2018. View details   View 263 investments »     Fundraising   Vertex Ventures seeks $500M for China-focused fund Vertex Ventures is raising a $500 million vehicle that will target China-based tech companies. The firm is backed by Singapore's sovereign wealth fund Temasek. View details   View 121 investments »   Seven Point closes $120M continuation fund Seven Point Equity Partners has closed a continuation fund that allowed some investors to exit their stakes in The RiteScreen Company. Seven Point raised about $120 million for RS7 Continuation Fund from existing LPs as well as new investors led by Timber Bay Partners. View fund   View 4 investments »     Investors   Steve and Connie Ballmer back VC, PE firms with Black managers Former Microsoft CEO Steve Ballmer and his wife, Connie Ballmer, have committed $400 million of personal capital to back Black PE and VC managers, The Wall Street Journal reported. The Ballmers committed $150 million to two new funds-of-funds—managed by Goldman Sachs and GCM Grosvenor—that will back firms with Black owners or managers. They committed another $250 million to Black-founded asset managers Ariel Investments and Fairview Capital. View details   View 2 investments »     Chart of the Day   Source: PitchBook's Q2 2022 US PE Middle Market Report   Who's in the newsletter today? People Steve Ballmer Investors AUA Private Equity Partners Ara Partners Ariel Investments Bonfire Ventures CIVC Partners Cordis Cormorant Asset Management Davidson Kempner Fairview Capital Fortress Investment Group GCM Grosvenor Goldman Sachs Greycroft Harrington Discovery Institute Hellman & Friedman Horizons Ventures Lumira Ventures Mubadala Novartis Oaktree Capital Management Odyssey Investment Partners OrbiMed Pioneer Point Partners RedBird Capital Sampension Seven Point Equity Partners Shell Snow Peak Capital Timber Bay Partners Trustar Capital Vertex Ventures Companies Credit Key KKR Magna Legal Services MedAlliance Nature Energy Nourish Ingredients Orionis Biosciences PIC Therapeutics Priority Power Management The RiteScreen Company TruFood Manufacturing Limited Partners Temasek Service Providers AB Power Advisors     About PitchBook | Terms of use | Advertise with us | Contact Follow us: This email was sent to pitchbook@quicklydone.com via the PitchBook Platform. Do you want to change your email address, get a different edition or unsubscribe? Manage your subscription here. © 2022 PitchBook. Win what's next. All rights reserved.