Category Archives: WEEKLY SPIN

AXA and Finerge: ‘Watt’ a team

The alternatives division of AXA IM has swept into Portugal to acquire a 25% stake in Finerge, a renewable energy platform, from Igneo Infrastructure Partners. Watt a team this could be. AXA IM is in its element with this strategic investment. It perfectly aligns with the firm’s strategy of investing in decarbonization-focused assets, and underscores the importance of infrastructure investment as Europe transitions to a net zero economy. The Finerge platform invests in, and operates, a series of wind farms and solar cell plants across Portugal and Spain. The winds of change are growing in strength, so expect to see more investment managers acquiring energy transition assets over the coming years.

inspired by Funds Europe

Powder puff

Buyout groups find themselves at a crossroads. Even though M&A deal volume is strong, deal value is falling.Purchase price multiples have fallen 20% from their 2021 peak. And as GPs consider where to put their record amount of dry powder to work, high interest rates mean that a greater frequency of smaller deals are being completed: causing a divergence between deal value and deal count. Year-to-date, the dollar value of M&A activity is down a third. Shopping around for cheaper transactions is likely to be a temporary fashion trend, as buyout partners come under increasing pressure from LPs to put more of their dry power to work. For now though, it seems bargains rather than trophy assets are the preferred option.

inspired by Pitchbook

Summit to Plummet

Europe’s venture capital market has been in somewhat of a freefall this year, with deal value 60% lower than the first half of 2022 and 34% lower than the second half of 2022, according to Pitchbook’s Q2 2023 European Venture Report.Small deals, up to EUR1 million in size, have effectively entered a cryogenic chamber, signaling bad news for companies searching for seed and pre-seed capital, as VC managers focus more on supporting existing investee companies. This has contributed to a slower pace of dealmaking, as the teeth of a higher interest-rate economy begin to bite. Exits too have all but dropped off a cliff, totaling a mere EUR3.5 billion for the first six months of the year. It is enough to give VC managers and their investors a dose of the blues.

inspired by Silicon Canals

Out of credit

Deal-making might be about to get a little harder for PE firms using Citigroup, with news that it is curbing its subscription credit facilities.Not ideal for those who use credit lines to do deals to avoid issuing capital calls to LPs. The bank has decided that PE funds that are not taking advantage of its wider range of products and services will have the credit tap turned off. Could this become a wider trend as US banks assess the profitability of PE funds? It might be a stretch to call this a credit crunch, but it could place some GPs in an awkward position if they wake up to find that their subscription has been canceled.

inspired by Yahoo Finance Australia

PE-arl of the Orient

All roads are leading to Asia Pacific, as mid-market PE firms seek to expand their LP base.Fund-of-fund investors such as Asia Heritage are joining forces with GP stakes investors including Bonaccord Capital to help some of its mid-market managers develop new relationships with Asian LPs. Could this be a feast in the East, or just a flash in the pan? Asian investors including UHNW individuals are looking to tap in to alternative investments in the West. Given that the region is home to more than 67,000 of them, it could well present a kingdom of riches for US firms to tap in to over the coming years. US managers will doubtless be hoping that it becomes the PE-arl of the Orient, as they expand their fundraising efforts.

inspired by Pitchbook