Meme - Honey I’ve shrunk the loan

Citrix debt fix

A syndicate of banks who helped finance the Citrix Systems buyout to the tune of $15 billion have seen an oversubscription of interest among investors.The syndicate discounted the debt to around 92 cents on the dollar in response to rising interest rates. In response, investors have swarmed like bees to honey. It is not yet known whether the discount will be adjusted, or whether the syndicate will look to offload more of the debt than originally planned. Either way, it is a sign that investors still want the sugar rush of a sweet deal in leveraged finance.

inspired by REUTERS

GIF - Homemade chips always taste better

Feeling chipper!

Brookfield Asset Management has put its chips on the table and agreed to jointly finance Intel Corporation’s semiconductor factories in Arizona to the tune of circa $30 billion. It is a sign of US chipmakers’ intent to onshore chip production in a bid to overcome global supply chain issues and follows President Biden’s introduction of the CHIPS and Science Act, providing subsidies to domestic chipmakers. The financing cost is believed to be in the 4.4% to 8.5% range. It goes to show that when the chips are down, US corporations are willing to explore new initiatives. Watch this space for further joint financing arrangements between corporate America and private capital.

inspired by REUTERS

GIF - This is further down than I thought!

Going…going…not gone public!

Private companies are feeling the burn.  According to Dealogic, IPO volumes are the lowest they’ve been since 2009, totaling $5.1 billion year-to-date and causing company CEOs to apply Factor 50 sun protection inside the office – as well as on their summer holidays – as they look to ride out the market volatility. The extent of the IPO freeze – to continue the seasonal reference – puts 2022 at risk of being one of the worst ever years for exchange listings. Many will be hoping that inflation calms down and the markets regain a spring in their step; otherwise it could be a winter of discontent.

inspired by PE News

GIF - Karakoe

Private equity finds its Seoul

South Korea is fast becoming the life and soul of Asia’s private equity industry.Deals rose 100% in 2021 to nearly $30 billion and its buyout market has assumed “disproportionate importance” according to Goldman Sachs. Like any good party, the right ingredients need to be in place. Rather than good music and a finely stocked bar, South Korea boasts a strong financing environment, a slew of global conglomerates and plenty of family-founded businesses that must be music to GPs’ ears. Korean private equity groups are coming of age. The stage is set for them to take on their global peers and showcase the country’s VIP credentials.

inspired by Financial Times

Gulf in expertise

Expect to see a flurry of Gulfstream jets flying in as managers expand their network.Macro fears and the performance of equities and bonds are pushing Middle East investors to bridge the gulf in private markets expertise and increase their number of strategic partnerships. According to a new study by Invesco, sovereign investors look set to forge further ties with PE, infrastructure and real estate managers over the next five years as they look beyond the region.

inspired by Gulf Business

GIF - It's a family affair

Parental guidance advised

Warren Buffett’s protégé, Tracy Britt Cool, honed her finance and business expertise on the family farm.Now she’s hoping that some of the companies she invests in at Kanbrick – her new investment firm – will turn out to be geese that lay multiple golden eggs! Key to that be taking a long-term commitment to partnering with family-owned companies and providing them with a safe home in which to thrive. This will be no cattle auction, though, where companies are bought and flipped. Expect to hear a lot more about Kanbrick as it channels its animal spirit over the coming years.

inspired by The New York Times

GIF - Whoops...Valuation bubble just burst

Goodbye to the days when we basked in PE’s performance glow

The valuation bubble in some areas of the VC market has popped, drenching US endowments, including the ones belonging to the Ivy League, in potential losses as market writedowns begin to take effect. Endowments will be hoping for a quick clean-up, with some pushing GPs to mark down the value of investments rather than kick the can down the road in the hope of a market rebound. Private equity has basked in the rays of stellar performance for years. Today’s valuations, though, look like raining on everyone’s parade.

inspired by Bloomberg