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| In today's Daily Pitch, you'll find: | | | | | |
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| PE hangs in the balance as recession odds grow | | Slower growth, higher short-term interest rates, tight labor markets—as one economic indicator after another points to an increasingly likely recession in late 2023 or early 2024, the rate of PE dealmaking hasn't shown such signs of weakness. But tougher financing conditions might finally slow down deal activity in coming quarters.
Our Q4 2022 Quantitative Perspectives Report breaks down the deteriorating macro backdrop and explores how those dynamics could affect the PE market next year. Key takeaways include: - A soft landing is becoming less and less likely, and the odds of a recession have risen to 65% in recent months, our model predicts.
- The leveraged loan market, which has fueled the buyout engine for years, has nearly shut down as new debt issuance fell to the lowest volume in more than two years.
- Lags between public and private market reporting mean that many LPs' portfolios are likely overweight to private investments. That could make fundraising a greater challenge for GPs, especially those with unproven strategies.
| | | | | | | | | Research: ESG disclosures linked to stronger PE fund performance | |  | | (Avigator Fortuner/Shutterstock) | | | PE firms have been increasing their ESG disclosures, and the trend is associated with stronger fund performance, according to a London Business School research paper. The research, which uses word counts of ESG-related terms on PE firms' websites to gauge disclosure rates, found that from 2000 to 2020, these word counts grew 200%. This increase in ESG disclosure was also associated with a 4.9% increase in the net IRR of a fund.
With increasing regulatory and media attention on ESG issues, LPs are more inclined to require ESG disclosures from all funds in which they invest, including privately managed vehicles. PE firms have stepped up voluntary disclosures to remain competitive with public firms. | | | | | | | |
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| A message from PitchBook Media | | |
| PitchBook's 2023 Media Kit released | | Year to date, PitchBook's newsletters have over 161 million impressions and over 744,000 report downloads. Partnering with PitchBook Media is a way to feature your firm's insights in one of the most popular venues for timely and relevant PE and VC articles, news, asset class reports and custom white label reports.
The brand-new 2023 Media Kit contains all the details to help your firm position itself in front of a VC or PE audience.
Click here to download it today or to speak to someone on the media team. | | | | | | | |
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| Motive Partners dives deeper into VC with Embedded/capital buy | |  | | (Dilok Klaisataporn/Shutterstock) | | | Fintech-focused PE firm Motive Partners is boosting its early-stage investment capabilities and has agreed to buy German VC Embedded/capital.
In recent years, PE firms have been increasing their participation in venture deals as they seek to diversify their activities. | | | | | | | | | Video: Siam Capital shares insights on VC investing in sustainability | |  | | Sita Chantramonklasri, founder and general partner of Siam Capital (Lukas Schulze/Web Summit) | | | At the recent Web Summit tech conference, PitchBook caught up with Sita Chantramonklasri, founder and general partner of Siam Capital, a New York-based VC that invests in the consumer technology and sustainability sectors.
Chantramonklasri explained how sustainable investment is generating more opportunities for wealth creation due to growing consumer demand for products tackling the world's environmental and economic crises. | | | | | | | | | Ukraine war sparks slowdown in Central, Eastern Europe PE fundraising | |  | | (evan_huang/Shutterstock) | | | Central and Eastern Europe have always accounted for a much smaller share of overall European PE activity. But after a few years of consistent PE fundraising, 2022 has seen a marked decline due to Russia's invasion of Ukraine.
We look at some of the largest fund closes since 2016 and the top LPs committing capital to the region. | | | | | | | | | | While it can be expensive to refurbish old buildings, many of London's landlords will need to embrace energy-efficient offices before they see any interest from corporate tenants. [The Wall Street Journal]
One writer's thoughts on why FTX's collapse illustrates the fallout that can come with placing too much confidence in tech leaders. [Financial Times]
Where do most of the world's soccer balls come from? [Bloomberg] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 400 Deals | 2003 People | 630 Companies | 19 Funds | | | | | | |
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| 2020 Vintage North American VC Funds | | | | | | |
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| PayZen raises $220M in equity and debt | | | Fintech company PayZen has taken in $20 million in equity led by 7wireVentures and secured a $200 million credit facility from Viola Credit. The funding will be used to expand the company's healthcare financing service. | | | | | | | Swell Energy takes home $120M | | | | | | | | | | | | | | | Aura scores $26M in equity and debt | | | Digital picture frame startup Aura has raised $26 million in equity and debt led by Lago Innovation Fund, TechCrunch reported. | | | | | | | | | Taktile has raised a $20 million Series A co-led by Index Ventures and Tiger Global. The company, which is based in Berlin and New York City, helps businesses to leverage data in decision-making. | | | | | | | Niron Magnetics secures $17M+ grant | | | | | | |
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| Care.ai raises $27M from Crescent Cove | | | Crescent Cove Advisors has invested $27 million in Care.ai, which uses AI to monitor patients in hospitals and nursing homes. Care.ai plans to use the funding to deploy its technology beyond its existing 1,500-facility customer base. | | | | | | | Stonepeak, Spirit Super to acquire Australian port | | | | | | |
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| Palm Beach exits safety equipment maker Cadre | | | | | | |
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| HC9 Ventures raises $83M fund | | | HC9 Ventures has closed an $83 million fund to back seed- and early-stage healthcare software and services startups. The firm has invested in mental health companies Forge Health and Psych Hub. | | | | | |
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| Morgan Stanley launches emissions-focused PE platform | | | Morgan Stanley Investment Management has created a growth-equity platform dubbed 1GT that is intended to invest in companies that would collectively avoid or remove one gigaton of carbon dioxide or equivalent emissions from the atmosphere by 2050. So far, the platform has deployed $600 million. | | | | | |
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