EQT auction plan joins hunt for liquidity

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The Weekend Pitch

October 22, 2023

Presented by Masterworks

(Jenna O'Malley/PitchBook News)

As we near the end of the year, a recovery in the private equity exit market still looks some way off.

In the first nine months of the year, there were just 885 PE exits in the US worth a combined $182.9 billion, according to PitchBook's Q3 2023 US PE Breakdown, putting the year on track for the lowest annual totals in a decade. Europe, meanwhile, has seen 775 exits close over the period, PitchBook data shows, compared to 1,455 for the entirety of last year.

This lack of liquidity has driven private equity firms to use ever more creative ways to redistribute capital to their LPs.

A recent example is Swedish PE giant EQT, which is planning to conduct private stock sales for its portfolio companies in order to provide liquidity to its LPs, according to the Financial Times.

The proposal would see the firm hire an investment bank to find interested parties on both the buy and sell side, with said bank then leading negotiations on valuations. The unusual part here is that only EQT's existing LPs will be involved in transactions.

This is the Weekend Pitch, and I'm Leah Hodgson. You can reach me at leah.hodgson@pitchbook.com or @LeahFHodgson on X, formerly known as Twitter.

Trivia

(KDP/Getty Images)

Our latest Emerging Tech Research gave an overview on foodtech, a growing vertical attracting VC attention that operates on innovation in the food system. Several subsegments encompass the vertical. Which of the following is NOT a segment of foodtech?

A) Cattle maturation
B) Alt proteins
C) Restaurant and retail tech
D) Food production

Find your answer at the bottom of The Weekend Pitch!

Quote/Unquote

(Spencer Platt/Getty Images)

"A range of uncertainties, both old and new, complicate our task of balancing the risk of tightening monetary policy too much against the risk of tightening too little."

—Fed Chair Jerome Powell, making remarks at the Economic Club of New York.

Monopoly scrutiny could threaten M&A landscape

(Bet_Noire/Getty Images)

Only a fraction of the M&A conducted in the US faces true scrutiny from antitrust regulators. Proposed rule changes from the Federal Trade Commission could broaden the parameters of deals that would qualify for investigation—but will the agency actually enforce those rules?

Corporate M&A and private market investors are torn on whether a regulatory shift could affect—or is already affecting—the M&A landscape. Our analyst note Increased Antitrust Scrutiny and Complexity for M&A weighs both sides of the discussion.

Sunny days ahead for Europe's venture market?

(M.A. Josephson/Getty Images)

Recovery could be on the horizon for Europe's venture market after registering its third consecutive quarterly increase in deal value in Q3.

Our Q3 2023 European Venture Report finds that 2023 is seeing levels of activity similar to the height of the VC bubble. Deal value still remains weak, though, so Europe isn't quite out of the woods yet.

Green shoots of recovery may be sprouting for Euro PE

(sarayut Thaneerat/Getty Images)

Deal value for European private equity may have fallen in Q3 compared with Q2, but total deal value for this year is on course to rival 2019—a market highpoint.

It is still way too soon to call a recovery, but our Q3 2023 European PE Breakdown outlines some promising market signs. Financial services dealmaking, for instance, has had a record quarter, and exits are picking up.

Stay tuned

Keep an eye out for these insights and research reports coming out this week:

Q3 2023 Global M&A Report
Analyst Note: Integrating Digital Assets and Crypto Into Traditional Finance
Analyst Note: Q3 2023 IPO and S1 Observer

Trivia

Answer: A)

Cattle maturation is not a segment within foodtech. To read about foodtech and its many segments, check out our 2023 Foodtech Overview.

This edition of The Weekend Pitch was written by Leah Hodgson, Marie Kemplay and Emily Burleson. It was edited by Andrew Woodman and Ron Prichard.

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EQT auction plan joins hunt for liquidity

Trivia

Quote/Unquote

Monopoly scrutiny could threaten M&A landscape

Sunny days ahead for Europe's venture market?

Green shoots of recovery may be sprouting for Euro PE

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Stay tuned

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