Public listings have been a notoriously difficult exit path for sponsors over the past two years but recent months have witnessed a signal change as vendors learn how to navigate new equity capital markets.

Mergermarket’s Head of Auctions sits down with ION Analytic’s Global ECM Editor Sam Kerr to take stock of how funds are viewing ECM, structuring listings for the best outcomes and what Donald Trump might mean for global equity markets.

• Introduction - 00:34
• Large-cap exits - 1:49
• Failed sale to IPO - 4:50
• Structuring a successful listing - 9:09
• A new US President - 16:55

You can listen to the podcast on your favourite podcasting platforms, including Spotify and Apple Podcasts.

If you would like to hear more podcasts produced by ION Analytics, you can access the ION Analytics channel on Apple Podcasts.

Mergermarket’s Head of Auctions Rachel Lewis speaks with Debtwire’s Head of Private Capital Josh O’Neill about how the deal financing environment for private-equity buyouts is evolving as we approach the end of 2024.

As we head into the final quarter of the year, European buyouts are on par with the total disclosed value seen across the whole of last year - standing at EUR 133bn. The total number of deals is, however, still down at 946 versus 1,234.

Direct lenders have always had a vital role to play in financing leveraged buy-outs but their approach to auctions, to lending and to sponsors has changed in a higher interest rate and high inflationary environment.

Against this backdrop, O’Neill and Lewis discuss from both of their sides of the table - equity and debt - how the changing financing environment will impact the pipeline for the rest of the year and heading into 2025.

• Introduction - 0:25
• Pipeline from the lenders’ perspective - 2:35
• Protecting downside risk - 7:57
• Lending relationships with sponsors and auctions - 12:00
• Opportunities in lapsed deals - 19:59
• Debt-for-equity swaps - 22:45

Theme music: ©2012 Kick Up The Fire

Funds editor Harriet Matthews speaks to William Barrett, co-founder and managing partner at private capital adviser Reach Capital, about the changing private capital advisory market, how the firm is advising its private equity (PE) clients to navigate primary and secondary fundraises in the current market, and what’s next for the independent placement agent.

Investment banks have been building up their private fund advisory capabilities in recent years via consolidation, with notable recent deals including Houlihan Lokey’s acquisition of Triago. They have also hired staff and even engaged in joint ventures with specialised firms to offer fundraising or secondaries advice to their clients.

Against this backdrop, and as an independent private capital advisor, Barrett discusses how Reach Capital has continued to develop its service offering, including the addition of private wealth capabilities. He also shares insights into how Reach Capital approaches taking on primary and secondary capital raising mandates.

Given the challenging fundraising market, there are certain steps that GPs can undertake to pave the way for a successful fundraise, according to Barrett. This includes knowing your client, including the context they are operating in and the other types of investment opportunities that might be on the table for them.

Lastly, Barrett shares his outlook for the primary PE fundraising market and how this will develop in the coming months, and discusses how Reach Capital is planning to continue to grow its service offering and the technology and data that supports it.

Introduction – 0:42

Interview with William Barrett, Reach Capital – 2:19

Current state and evolution of the private capital advisory market – 2:27

Adapting to the needs of GP clients – 5:24

Getting comfortable with taking on primary mandates – 10:00

Taking on secondary mandates: comfort and transparency – 12:39

Advice to GPs: speak to your clients, prepare, and tailor your LP pitches – 16:07

The outlook for primary private equity fundraising – 22:07

What’s next for Reach Capital? – 24:38

You can listen to the podcast on your favourite podcasting platforms, including Spotify and Apple Podcasts.

If you would like to hear more podcasts produced by ION Analytics, you can access the ION Analytics channel on Apple Podcasts.

Theme music: ©2012 Kick Up The Fire

In this episode, funds editor Harriet Matthews and senior private equity reporter Rachel Lewis share insights from the Mergermarket Private Equity and M&A Forum Europe, exploring the outlook for private equity buyouts, exits and fundraising, as well as the outlook for specific markets, including the UK.

The Forum, which took place on 21 May at the Landmark Hotel in London, brought together private equity and M&A market participants for a day of panel discussions and networking.

In her keynote speech, JP Morgan’s global head of M&A Anu Aiyengar summarised the macro drivers for dealflow in 2024 across public and private markets, highlighting UK take-private activity in particular as a bright spot for dealmaking.

Elsewhere at the conference, panellists discussed topics including the prevalence of preferred equity as a liquidity solution for GPs, how GPs are approaching fundraising in a liquidity constrained environment, and LP preferences and concerns in the current market.

While much has been made of a potential uptick in dealmaking in 2H 2024, conference attendees were cautious when it came to making predictions. Positive indicators include strategic appetite for private equity-backed assets, with hope for interest rate cuts also expected to allow the cogs in the private equity machine to start whirring again.

Mergermarket data round-up – 1:28

Keynote speech takeaways – 3:51

UK market sentiment – 5:20

Fundraising outlook – 6:18

Preferred equity and bridging the valuation gap – 7:20

Returns and distributions – 10:50

Large-cap exit options – 12:15

You can listen to the podcast on your favourite podcasting platforms, including Spotify and Apple Podcasts.

If you would like to hear more podcasts produced by ION Analytics, you can access the ION Analytics channel on Apple Podcasts.

Theme music: ©2012 Kick Up The Fire

European funds editor Harriet Matthews hosts fellow funds editors Tim Burroughs (managing editor, AVCJ) and Tom Cane (North America) to discuss the insights they gleaned from the Mergermarket New York Private Equity Forum, comparing and contrasting this with PE activity in other regions, and considering what the themes that emerged mean for the outlook for the industry in the US.

European funds editor Harriet Matthews hosts global funds editors Tim Burroughs (managing editor, AVCJ) and Tom Cane (North America) to discuss the insights they gleaned from the Mergermarket New York Private Equity Forum, comparing and contrasting this with PE activity in other regions, and considering what the themes that emerged mean for the outlook for the industry in the US.

Attendees gathered at the Pierre Hotel in New York on 30 April to share insights on the US PE market, exploring topics including exits, value creation, valuation, GP-led secondaries, private credit and the appeal of various sectors.

The Mergermarket team shares key takeaways from the day, summarising the perspectives of GPs and LPs. Cautious optimism was in the air, with an uptick in exit volume in 1Q 2024 bolstering hopes for a reopening of the exit market.

Challenges remain in dealmaking and fundraising, however. Valuations have yet to be truly tested, with only the best assets typically trading over the past 12 months. Meanwhile, LPs are continuing to work out how to manage their liquidity, with distributions having fallen significantly from a high point in 2021.

The team also provides insights on how the US outlook compares of that in Europe and Asia when it comes to secondaries and dealmaking, as well as the geopolitical climate.

Introduction – 0:34

Dealflow and valuations – 1:30

The exit outlook – 4:17

GP-led secondaries – 6:33

The fundraising market – 9:48

Further themes: value creation private credit – 12:53

The US elections and the H2 outlook – 15:21

You can listen to the podcast on your favourite podcasting platforms, including Spotify and Apple Podcasts.

If you would like to hear more podcasts produced by ION Analytics, you can access the ION Analytics channel on Apple Podcasts.

Theme music: ©2012 Kick Up The Fire

With “cautious optimism” the prevailing sentiment for the start 2024, the Mergermarket private equity (PE) reporting team takes stock of our 1Q 2024 European private equity data, providing insights into how this year could shape up for deal activity, exits and fundraising.

2024 started off more strongly than 2023 in terms of private equity activity, with deal count up by 21% and disclosed deal volume more than doubling versus Q1 2023. Activity has dropped since Q4 2023, however, with deal count down by 6% and disclosed deal volume by 72%.

Although a number of successful exits were announced in the past quarter, PE firms made 13% fewer exits in Q1 2024 versus Q1 2023, marking the worst quarter for exits since the start of the COVID-19 pandemic.

This episode begins with an overview of Mergermarket PE buyout, exit and fundraising data, highlighting the top sectors and geographies.

With the PE industry is preparing for an uptick in activity over the course of the coming year, the Mergermarket team explores the current macro picture, deals to watch out for this year, and changes to deal structuring that GPs are pursuing to get deals done, including minority stake sales and equity syndication.

Data overview: PE deal activity, exits and fundraising – 0:42

The macro picture and the road ahead – 4:26

The outlook for PE exits – 7:54

Processes to look out for – 10:10

The rise of deal-by-deal fundraising – 11:44

Changes to deal structuring – 14:26

Going back to exits – 17:00

You can listen to the podcast on your favourite podcasting platforms, including Spotify and Apple Podcasts.

If you would like to hear more podcasts produced by ION Analytics, you can access the ION Analytics channel on Apple Podcasts.

Theme music: ©2012 Kick Up The Fire

With GP-led secondaries becoming a mainstay in the private equity exit toolbox, Mergermarket's funds editor Harriet Matthews and senior private equity reporter Rachel Lewis discuss the outlook for this growing part of the private equity market. In a guest interview, Elena Laleh, managing director at Kline Hill Partners, discusses the secondaries investor’s European and North American strategy, highlighting the sizeable opportunity to be found in GP-leds in the lower mid-market.

With EUR 47.3bn raised across 16 secondaries funds active in Europe in 2023, versus EUR 30bn across 18 funds in 2022, LP demand for secondaries strategies shows no sign of slowing in the face of a tough fundraising market.

While megacap fundraises of EUR 10bn-plus from the likes of Goldman Sachs, Glendower Capital and Lexington Partners typically bolster secondaries fundraising volume, with large-cap deals grabbing headlines, there is also ample opportunity in the lower mid-market, where GPs are also looking to continuation funds as an exit option, but investor capital is more scarce.

Elena Laleh discusses Kline Hill’s focus on “trophy assets” in this market segment, which sees it engaging in deals of less than EUR 250m in size and deploying around two-thirds of its capital in the US and one third in Europe.

She also shares her view on whether an anticipated exits uptick will affect GP-led secondaries dealflow, and discusses the importance of due diligence, returns and alignment.

Following the interview, the Mergermarket team dissects the key takeaways, sharing data on PE exits in the lower mid-market and recent reporting on secondaries activity in this market segment.

Introduction – 0:38

Current state of the GP-leds market – 1:34

Secondaries fundraising: data recap and LP appetite – 4:35

Interview with Elena Laleh, Kline Hill Partners – 8:48

• Kline Hill’s GP-led strategy and lower mid-market focus – 9:56
• US versus European GP-led secondaries market dynamics – 11:41
• GP-led secondaries and exit environment optimism – 12:52
• Valuations in GP-led deals – 15:58
• Returns in the GP-led secondaries market – 18:24
• Capital supply in the secondaries market – 21:15
• Kline Hill’s view on alignment – 23:37

Key takeaways – 25:16

Lower mid-market PE exits – 26:15

GP due diligence in secondaries deals – 29:06

Mergermarket reporting on recent lower mid-market GP-leds – 31:03

Adviser adaptation and market consolidation – 33:20

You can listen to the podcast HERE, as well as your favourite podcasting platforms, including Spotify and Apple Podcasts.

If you would like to hear more podcasts produced by ION Analytics, you can access the ION Analytics channel on Apple Podcasts.

Theme music: ©2012 Kick Up The Fire

Mergermarket’s funds editor Harriet Matthews speaks to Pierre-Antoine de Selancy, managing partner and co-founder of net asset value (NAV) lender 17Capital, about the evolution of NAV financing and its use cases in the current market, as well as wider industry reservations about the use of this type of leverage.

The use of and interest in NAV financing has been growing in recent years. In times of restricted liquidity and a tough fundraising market, GPs can use this tool for situations including refinancing a group of portfolio companies to take advantage of M&A opportunities.

De Selancy addresses some of the questions that LPs have around NAV financing, arguing that using leverage is a core skill of private equity professionals in creating value for investors, and the use of NAV financing is part of this process. “If limited partners are worried about GPs putting in place debt, they should not be investing in private equity,” he said.

90% of the money used in NAV financing goes into portfolio companies, whereas 10% is used to make distributions, he said, playing down concerns around “fake DPI”. “It’s not a competitive world – it’s an ultra-competitive world,” he said, noting that LPs now have more choice than ever and are applying increasing scrutiny to how GPs are creating value and balancing this with risk. It is important that GPs “do the right thing” for their LPs, he said, emphasizing the importance of communication.

Lastly, de Selancy discusses the future of NAV financing as a “new niche” and “the fastest growing market in private credit”, features which are likely to drive the growth of 17Capital itself.

0:39 – Introduction

2:54 – Interview with Pierre-Antoine de Selancy

• 3:26 – 17Capital’s strategy
• 4:49 – Current use cases for NAV financing
• 7:13 – NAV financing versus continuation funds
• 11:27 – Cost of capital dynamics
• 14:42 – NAV financing and LP sentiment
• 25:49 – What’s next for the NAV lending industry?
• 28:20 – 17Capital’s future growth

You can listen to the podcast on your favourite podcasting platforms, including Spotify and Apple Podcasts.

If you would like to hear more podcasts produced by ION Analytics, you can access the ION Analytics channel on Apple Podcasts.

Theme music: ©2012 Kick Up The Fire

In this week’s episode, Mergermarket's funds editor Harriet Matthews and senior private equity reporter Rachel Lewis explore how private equity (PE) firms are turning to various options in an effort to secure succession between generations of management, with a guest interview from Jon Harvey, Head of Relationship Management at Investec Fund Solutions.

As the PE industry matures and grows, with GPs growing from single-strategy firms to multi-strategy asset managers, the themes of succession and the value within private equity firms have grown in prominence.

The team kicks off the episode by discussing some recent examples of succession, including the reported search for a chairman at Bridgepoint [LON:BPT], and Cinven’s recent managing partner shake-up.

Investec’s Harvey starts off by discussing the rise in prominence of the theme of succession, some of the routes available to GPs (including GP stake sales, IPOs, and management company financing). Harvey discusses how the theme of succession is linked to wider pressure within the PE market, including exits, fundraising, and securing a GP commitment for their next fund. He also shares his insights on what GPs should consider to shore up culture and create alignment within their teams when managing succession.

Lastly, the Mergermarket team discusses key takeaways from the interview, and also discusses some situations where succession has not been so smooth, as well as the importance of succession and monetisation for growth, and the issue of team retention.

Introduction – 0:38

Recent examples of succession plans – 2:14

Interview with Jon Harvey, Head of Relationship Management at Investec Fund Solutions – 4:40

• Triggers for succession – 5:17
• Pros and cons of different succession paths – 8:59
• LP alignment and GP commitments – 13:04
• How to use permanent capital – 17:31

When succession goes wrong – 23:40

Monetisation for growth – 25:00

Retention in PE – 29:25

You can listen to the podcast on your favourite podcasting platforms, including Spotify and Apple Podcasts.

If you would like to hear more podcasts produced by ION Analytics, you can access the ION Analytics channel on Apple Podcasts.

Theme music: ©2012 Kick Up The Fire