Yearly Archives: 2024

Credit rates talent

Private credit firms, awash with capital, are splashing it around in order to secure the best talent. Compensation packages are becoming AAA-rated as credit managers look to expand their headcount to meet the growing demands of non-bank lending. It’s a nice problem to have but competition is bringing things to the boil with some instances of firms taking each other to court. By hiring young professionals, firms are looking to expand their origination and deal teams and put all of their fresh capital to work. Last year, private debt funds raised $190.9 billion according to Pitchbook although late reporting is expected to push this over $200 billion. With cash to burn, credit managers will be hoping that they allure the brightest minds and continue their expansion journey. Suddenly, private equity is no longer the de facto option for finance graduates.

Inspired by The Wall Street Journal

Ice cream headache

Global conglomerate Unilever is believed to be considering options to offload its ice cream business to private equity. Could this be a sweet acquisition opportunity or an ‘ice cream headache’? It’s early days but if Morgan Stanley and JP Morgan have gone out to market to whip up potential interest for the business division that includes Ben & Jerry’s, Wall’s and Magnum. The decision for the spin-off is part of the consumer goods empire’s turnaround plans, and would lead to 7,500 job cuts. Time will tell if the conglomerate decides to pull the lever. For now, it is an opportunity for PE firms to start investigating the merits of such an acquisition and embrace their inner ‘Magnum P.I.”.

Inspired by the Financial Times

My way is the Highway

Infrastructure fundraising hit a bump in the road last year, falling 50%. But a new report by Boston Consulting Group, Infrastructure Strategy 2024: Creating Value Through Operational Excellence, reveals that investor sentiment is proving resilient – much like the asset class itself. According to the report, LPs expect to boost their investments by more than $600 billion by 2027. This will be powered by an adjustment in transaction prices coupled with a need to return capital to long-standing investors, with plenty of dry powder waiting in the wings. However, as the report points out, there will be an emphasis on operational excellence with leading funds using well-constructed playbooks to drive value across the full investment cycle. The institutional dam might not be about to burst, necessarily, but anticipated capital inflows over the coming years show that infrastructure remains as solid as ever.

Inspired by PR Newswire

Airport control

US private equity giant Carlyle are to take control of Southend airport in the south of England. The deal involves LSE-listed aviation group Esken – owners of Southend – settling a debt of £193.75 million, after Carlyle claimed Esken had broken the terms of a £125 million loan. The turbulence has now subsided, with Southend set to operate under 82.5% control of the Carlyle Global Infrastructure Fund with Esken retaining a 17.5% stake. It certainly puts a new spin on ‘airport control’. Carlyle will be hoping that the sky’s the limit under its new ownership.

Inspired by the Guardian

Trophy Asset

South Africa Rugby is hoping to land a conversion of a different kind, as it prepares to sell part of its commercial rights – valued at $375 million – in a private equity deal. The deal in question will involve selling a 20% stake to Ackerley Sports Group, a Seattle-based private equity firm, who beat CVC Capital Partners to the try line in December. The investment is designed to help South African rugby double its sponsorship revenue by the next World Cup in 2027. The rough and tumble world of professional rugby has once again proved alluring to the polished boardrooms of private equity. Will the deal prove to be a winning strategy? And become a veritable Boks of Delights? We shall see. In the meantime, SA Rugby will be scrumming down and setting up a company to hold the commercial rights. With Spring just around the corner, the Boks will be hoping to celebrate once again…this time, off the field.

Inspired by Bloomberg