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| In today's Daily Pitch, you'll find: | | | | | |
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| Secondaries emerge as leading private market's strategy through Q1 2022 | | While more muted performance in Q1 2022 dragged on the high returns of 2021, the 27% overall private capital return was still far above the 10-year average of 14.5%. PE and VC one-year rolling IRRs faltered through Q1, and analysts find it unlikely that those metrics—or PE and VC's now-negative quarterly returns—will reverse in the latter half of the year.
Meanwhile, secondaries funds landed in the top spot for rolling one-year IRR through Q1. And unlike PE and VC, IRRs for real estate and real assets kept climbing.
Returns in the private markets, which are still at historically high levels, also maintained their outperformance of public equities through Q1.
Our latest Global Fund Performance Report uses data through Q1 2022, as well as some preliminary Q2 figures, to provide a comprehensive look at how private market strategies have held up across PE, VC, real estate, real assets, private debt, funds of funds and secondaries. The report also examines how strategies' median returns could obscure wide ranges of investors' results. | | | | | | | | | Female founders remain resolute amid mounting economic pressures | | US VC deal value for female founders reached $32.4 billion through the third quarter of 2022, already more capital than any year prior to 2021, which saw record highs.
On the check-writing front, the numbers underscore that the industry is still a long way from equal gender and diversity representation. Female investors account for just 16.1% of VC decision-makers in the US. Furthermore, 95.5% of VC firms have a majority male population of decision-makers.
The latest edition of our All In Report, created in partnership with Beyond The Billion and sponsored by J.P. Morgan, Apex Group and Pivotal Ventures, breaks down the numbers by city, sector and exit activity. | | | | | | | |
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| A message from Golub Capital | | |
| Golub Capital knows sponsor finance | | Golub Capital's transactions span industries, execution styles and sizes—from deals below $20 million up to $2 billion unitranche facilities.
Golub Capital nurtures long-term, win-win partnerships of every size that inspire repeat business.
Learn more about the flexible financing solutions offered to private equity sponsors by this market-leading direct lender and credit asset manager. | | | | | | | |
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| Apollo's Tenneco buyout to test waters of leveraged loan market | | The leveraged loan market that powers the PE buyout industry slowed significantly in Q3 2022, down 75.9% from Q3 2021. In just the past two months, deals for Citrix, Brightspeed, Nielsen and Twitter have failed to fully clear the market, highlighting how banks have struggled to offload loans for leveraged buyouts to investors.
In this environment, the proposed $1.4 billion loan backing Apollo Global Management's potential buyout of automotive parts specialist Tenneco for $7.1 billion could signal a recovery. In our latest analyst note, PitchBook analyst Tim Clarke and LCD senior director Marina Lukatsky outline what to watch for when the deal gets priced next week. | | | | | | | | | Binance, FTX merger threatens to rock crypto investor confidence | |  | Binance CEO Changpeng Zhao
(Antonio Masiello/Getty Images) | | | Two of the world's largest crypto exchanges could merge in a fire sale that would be the most significant shock to the crypto industry in a year of brutal events.
Binance CEO Changpeng Zhao said the company had signed a letter of intent to acquire rival FTX, which was valued at $32 billion in January. The plight of FTX—whose CEO Sam Bankman-Fried had emerged as one of crypto's most powerful voices in Washington—threatens to shatter the confidence of VC firms that have piled into the sector. | | | | | | | | | Investors point to risks of venture debt | |  | | (eamesBot/Shutterstock) | | | The slowdown in VC dealmaking has led many startups to consider venture debt as a way to weather the current economic storm.
But if it isn't used prudently, it has the potential to sink a startup rather than save it, investors say. | | | | | | | | | University endowments are at a crossroads | |  | | (Jenna O'Malley/PitchBook News) | | | A year ago, university endowments were basking in bumper returns, which for some schools exceeded 50% for fiscal year 2021.
Now, they're facing their worst performance since the financial crisis: Endowments and foundations reported median losses of 7.8% for the fiscal year ended June 30, according to an estimate by Cambridge Associates. That's actually good news, since those results handily beat traditional stock-and-bond portfolios.
Thanks to their high exposure to private markets, endowments have been sheltered from the worst effects of the market sell-off. It will take several months, or even longer in the case of venture capital funds, for public and private asset prices to reach an equilibrium, assuming stocks and bonds remain depressed.
Within private asset portfolios, some strategies are faring better than others. High exposure to VC helped some endowments outperform in prior years, but some of those same VC funds are now a drag on returns. | | | | | | | | | | "Is being on Facebook a basic human right?" Here's an inside look at Meta's controversial oversight board, which sits at the heart of the content moderation debate. [Wired]
Slide decks replete with flying unicorns and geese laying golden eggs are soon to be replaced by a more sedate performance as Masayoshi Son steps back from delivering SoftBank's quarterly earnings. [The Wall Street Journal]
After decades of scandal and financial difficulty, Credit Suisse is spinning out investment bank First Boston, a move that some experts view as desperate. [Bloomberg] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 371 Deals | 1226 People | 426 Companies | 17 Funds | | | | | | |
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| 2014 Vintage Global Real Assets Funds | | | | | | |
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| A message from RBC Capital Markets | | |
| Will volatility in equity markets drive M&A? | | 2022 M&A activity has dropped below the highs of 2021, but remains strong compared to pre-pandemic levels. Slower economic growth, geopolitics and company actions to diversify supply chains are key factors feeding a trend toward more domestic M&A activity.
Which sectors are best positioned to capitalize on M&A growth? How is the current financing environment impacting dealmaking? Get the latest insights from RBC's expert bankers on M&A Inflection Points, a limited series podcast. | | | | | | | |
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| Laika banks $50M Series C | | | Fin Capital has led a $50 million round for Laika, which offers an automated compliance software and audit management platform. | | | | | | | Juvena Therapeutics lands $41M | | | | | | | | Eliyan nabs $40M to develop chiplet architectures | | | | | | | | Singapore's Speedoc secures $28M | | | | | | | | Insurtech startup Glow raises $22M+ | | | Glow, a provider of digital insurance services for small businesses, has raised $22.5 million in a round led by Cota Capital. | | | | | | | | | Veriti has raised $12 million in a round led by Insight Partners, in addition to a $6.5 million round led by NFX and Amiti. Based in Tel Aviv, the company is the developer of a security platform for organizations to monitor and manage exposure to threats. | | | | | | | | | Wib has raised a $16 million round led by Koch Disruptive Technologies. The Tel Aviv-based company's API security platform offers inspection, management and control in real time. | | | | | |
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| KKR to invest $400M in Serentica Renewables | | | KKR has agreed to invest $400 million in India-based Serentica Renewables, founded this year by Twinstar Overseas. Serentica aims to develop renewable power generation, especially solar and wind, then sell its electricity to industrial customers. | | | | | | | Arsenal Capital to boost Certara holding with EQT deal | | | EQT has agreed to sell 30 million shares of biosimulation company Certara to Arsenal Capital Partners for $449 million, or $15 per share. The deal would bring Arsenal's stake in Certara from 4% to 22%. In 2017, Arsenal held a majority interest in the company before selling it to EQT. | | | | | | | Trilantic's Outdoor Living Supply acquires LandCare | | | | | | | | HIG invests in ThoughtFocus, providing Blackstone exit | | | HIG Capital has invested growth capital in ThoughtFocus, a digital services consultant for customers in higher education, manufacturing and financial services. The deal allows Blackstone to exit a minority investment in the company from 2013. | | | | | |
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| HighVista closes credit fund on $450M | | | HighVista Strategies has raised $450 million for its latest fund, HighVista Opportunistic Private Credit Fund II, and held its final close. The firm plans to invest in real estate-backed credits, corporate credits and other private credit deals. | | | | | |
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"Our data estimates that more capital is expected to be sought at the late stage this year than ever before, yet the availability from investors, especially large nontraditional institutions, seems likely to leave a large gap between the numbers."
Source: PitchBook's Q3 2022 US VC Valuations Report | | | | | |
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