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The Daily Pitch: VC

June 6, 2023

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

In today's Daily Pitch, you'll find:

Our comparison of fund performance might surprise ESG-savvy investors and their critics.

Some major cryptocurrencies may finally be deemed securities if the SEC's lawsuit against Binance makes it to court.

Fundraising levels are down across nearly every private investing strategy, but GPs are not sharing that burden equally.

Today's Top Stories

Are 'ESG investors' underperforming?

As the crowd of ESG critics has grown, funds raised by asset managers that have made public commitments to ESG have garnered trillions of dollars. Some say considering ESG factors is integral to making and managing prudent investments. Others think ESG is a distraction and that its adherents sacrifice returns.

Our latest research analyzes the returns of Principles for Responsible Investment signatory funds, as well as vehicles whose managers didn't commit to upholding those guiding ESG principles. We determine how their performance compares across private equity, private debt, real assets and real estate from 2010 to 2018. The findings might surprise ESG-savvy investors and their critics.

read it now

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What the SEC's lawsuit against Binance means for crypto investors

Binance CEO Changpeng Zhao
(Stephen McCarthy/Getty Images)

The SEC has charged Binance and its CEO with 13 securities law violations including misleading investors, fraud and market manipulation.

If the case makes it to court, it has the potential to completely overhaul how some of the most popular tokens are traded in the US—and crypto investors' ability to sell them.

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A Message From G-P

Best practices for ensuring compliant global recruitment

Global recruitment offers opportunities for companies to access talent worldwide, but certainly comes with compliance challenges. Not adhering to local employment laws can lead to financial penalties and reputation damage. By planning your global hiring strategy ahead of time, you can prepare for success.

Begin by staying current with local labor laws and develop detailed, country-specific recruitment policies. As you start your talent search, prioritize diversity and an inclusive work environment to boost employee engagement and retention. Protect yourself by conducting thorough background checks and complying with data protection laws. Finally, establish a successful record-keeping process, tracking employee communication and safe-keeping key documents.

Reap all the benefits of building international teams by reading our blog on 7 Best Practices for Ensuring Compliant Global Recruitment.

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5 charts: Big GPs set the tone for fundraising

(masuti/Shutterstock)

From VC to PE and beyond, fundraising was down 15% to 64% across all private investing strategies in Q1—except for secondaries. The GPs that did rake in commitments tended to skew larger and more experienced, and their influence was especially pronounced in the one strategy that managed to get higher fundraising.

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Market map: VC dealmaking in UK continues to plunge

(Andrey_Kuzmin/Shutterstock)

The UK's venture capital market is having another rough year, with the country experiencing continuous quarterly declines in dealmaking since the start of 2022.

Check out our snapshot to see how Europe's largest startup ecosystem is faring across dealmaking, fundraising and exits.

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HPS' $10B direct lending fund shows hunger for private debt

(AlexZaitsev/Shutterstock)

Credit management giant HPS has bagged $7.3 billion in equity commitments for its latest direct lending fund, which primarily makes senior secured loans to midsized companies. In April, the firm wrapped up its fifth flagship junior credit fund with $12 billion, well above its target.

The fund closes come just as more investors are seeking out private debt investments.

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Recommended Reads

In a giant factory in California, thousands of screens, PCs and other old or unwanted gadgets are picked apart for materials. But what about the rest of our electronic waste? [The Guardian]

After a year, Amazon's $1 billion logistics venture fund is off to a slow start. [The Wall Street Journal]

A startup founder shares how the company pivoted after failing to raise a Series A. [Sifted]

Since yesterday, the PitchBook Platform added:

4

VC valuations

2088

People

466

Companies

22

Funds

See what our data software can do

The Daily Benchmark:
2018 Vintage Global Real Assets Funds

Median IRR

10.10%

Top Quartile IRR

18.09%

0.16x

Median DPI

Select top performers

Kayne Private Energy Income Fund II

Grey Rock Energy Fund III

Merit Energy Partners K

*IRR: net of fees

51 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

ITM, a German biotech company specializing in radiopharmaceuticals, has raised €255 million in a round led by Temasek.

Medical device company Conformal Medical has raised a $35 million Series D led by Sprig Equity.

Helium Health, an African healthtech startup, has secured a $30 million Series B led by AXA IM Alts, according to reports.

Finland's Fixably, which offers service management software for consumer electronics repair companies, has raised $10 million from investors including 468 Capital, Cusp Capital and Icebreaker.vc.

Business intelligence company Red Flag Alert has raised £4.5 million from Foresight and Uncapped.

Indian climate-tech startup Sentra.world has raised $2 million in a round led by Avaana Capital.

British cannabis company Grow Lab Organics has secured £1 million in a seed round.

PE Deals

KKR has agreed to buy out Circor International shareholders for $55 per share in a $1.6 billion deal, including debt. As of December 2022, BlackRock owned a 15% stake in Circor, which manufactures pumps and valves.

Warburg Pincus has invested in Great Hill Partners-backed ParetoHealth, an employee healthcare benefits platform focused on small to medium-sized businesses.

Nexa Equity-backed Storewise, which makes retail automation software for independent grocers, has acquired MarginMax, which facilitates deliveries and vendors for groceries.

Limerston Capital-backed Scottish holiday park operator Largo Leisure Holidays has made its first add-on acquisition with the purchase of sector peer Cruachan Farm.

Phoenix Equity Partners has invested in UK-based cybersecurity company Logiq from its 2022 Fund.

Stellex Capital Management has acquired MSS Group, a UK manufacturer of electrical components for the power sector.

Portfolio Companies

Neuralink, a startup founded by billionaire Elon Musk that is developing a brain-computer interface, is now valued at about $5 billion based on privately executed stock trades, Reuters reported.

SoftBank-backed Zume, which planned to develop pizza-making robots before pivoting to sustainable packaging, has shut down and is liquidating its assets, The Information reported.

Infarm has ended operations in Europe, Sifted reported. The vertical farming company plans to continue to grow its North American business, according to the report.

Exit & IPOs

Barnes Group has agreed to acquire MB Aerospace, an aircraft engine component manufacturer, at a valuation of about $740 million. MB Aerospace was last acquired by Blackstone through a leveraged buyout in 2015.

Fundraising

Archimed has held the final close of its latest healthcare fund on €3.5 billion.

UK-based, deep tech-focused firm IQ Capital has held the final close of its fourth fund on $400 million. Its LPs include British Patient Capital.

Innova Capital has held an interim close of its seventh fund focused on Central and Eastern Europe on more than €324 million.

Isomer Capital has held the first close of its new €250 million fund, securing one-third of its target from returning investors.

UK-based N4 Partners has launched its maiden venture capital fund targeting up to £5 million.

Chart of the Day

Source: The Transient Era of Billion-Dollar Funds

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PitchBook News - Are 'ESG investors' underperforming?

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