PitchBook News - Nothing is sacred as Carlyle cuts costs

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The Daily Pitch: VC

November 8, 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:

Few PE firms are willing to make big bets on healthcare services

Carlyle is cutting costs as it struggles to meet its own fundraising expectations

VC was the only private asset class to see its returns dip into negative territory in Q2

Bankruptcy timeline shows how WeWork stopped working

European VCs outperform US counterparts. These days that means smaller losses

Today's Top Stories

At Carlyle, cost cuts loom after disappointing fundraising

Carlyle CEO Harvey Schwartz
(PATRICK T. FALLON/Getty Images)

In Carlyle's third-quarter earnings call, CEO Harvey Schwartz said he was displeased with the scale of commitments from LPs to the firm's funds in Q3 and that cost-cutting inside the firm proceeded faster than expected.

The asset manager closed its latest flagship buyout fund with less than its predecessor while laying off some staff and pruning its PE investment targets.

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On shaky ground, PE taking no risks in healthcare services

The pace of PE dealmaking in healthcare services fell again in Q3—down 28% from the prior quarter and roughly half from the market's peak. 

Lenders have been stingier on financing, and few PE firms are willing to make big bets. The data from our latest Healthcare Services Report shows investors are focused on smaller deals, existing platform growth, and restructuring deals. 

The report spotlights our new subcategory data, which enables even more granular insights within the segments of clinical staffing, dental, dermatology, home-based care, mental health, musculoskeletal and primary care.

read the report

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Since yesterday, the PitchBook Platform added:

17

VC valuations

1751

People

592

Companies

18

Funds

See what our data software can do

The Daily Benchmark:
2018 Vintage Global Debt Funds

Median IRR

9.57%

Top Quartile IRR

15.30%

0.50x

Median DPI

Select top performers

Raith Real Estate Fund II

Oaktree Special Situations Fund II

PAG Enhanced Credit Fund II

*IRR: net of fees

85 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Xpressbees, an Indian logistics company, raised $80 million led by the venture arm of the Ontario Teachers' Pension Plan.

Cloud payments specialist Volante Technologies raised $66 million in debt and equity led by Sixth Street Growth.

OrsoBio, a biopharmaceutical company developing treatments for obesity, raised a $60 million Series A led by Longitude Capital and Enavate Sciences.

Vienna's Refurbed secured a $57 million Series C led by Evli Growth Partners and C4 Ventures for its refurbished products marketplace.

Milan-based fintech startup Qomodo raised €34.5 million in a round led by Fasanara Capital.

Madrid's Frenetic raised a $12 million Series A led by Kibo Ventures for its magnetics design platform.

Sift, a Los Angeles-based startup building a telemetry stack, raised $7.5 million led by Riot Ventures, TechCrunch reported.

London-based cybersecurity startup Risk Ledger secured a £6.25 million Series A led by Mercia Ventures.

Don't miss our upcoming webinar

Underwhelming stock performance thwarted the hope for a resurgence in IPOs this year, which was led by Instacart and Klaviyo's Q3 listings. An increasingly investor-friendly market is expected to further slow the pace of dealmaking, compress deal metrics and set an even higher bar for startups across the VC lifecycle. Our speakers will highlight findings from the Q3 2023 PitchBook-NVCA Venture Monitor, sponsored by Insperity, J.P. Morgan, Dentons, and Deloitte, and what investors should be aware of for 2024.

The liquidity crunch and shuttered IPO window have left startups across all VC stages with fewer options for receiving capital.

Dry powder figures appear strong, but without a consensus on whether the market has hit bottom, investors are more cautious than ever about deploying capital.

Portfolio markdowns, the denominator effect and interest rates have diminished LP interest in the VC asset class.

Register now to secure your spot.

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PE Deals

Ascendent Capital Partners has made a $1.6 billion bid to acquire Chinese-listed IT solutions provider Hollysys Automation.

ITE Management agreed to acquire SMBC Rail Services from Japanese financial services firm Sumitomo Mitsui Financial Group, which said it would post a $560 million post-tax loss on the freight car leasing company's sale.

MidOcean Partners acquired Texas-based Smith System Driver Improvement Institute, a workplace safety training specialist, from Levine Leichtman Capital Partners.

CapVest Partners acquired a majority stake in Recochem, a transportation and household fluid manufacturer, marketer and distributor, from HIG Capital, which retains a minority interest in the Canadian company.

EQT agreed to acquire UK-based battery storage developer and operator Statera Energy from InfraRed Capital Partners.

Onex and Anschutz Entertainment Group agreed to sell Los Angeles-based ASM Global, a live entertainment event venue manager, to Sixth Street-backed Legends, a New York-based venue planner and project manager for sports and entertainment brands.

Presidio Investors acquired a majority stake in California-based Almaden, a marketing supply chain services company.

May River Capital made an investment in Boston Centerless, a Massachusetts-based industrial business that manufactures and distributes precision metal ground bar material.

Portfolio Companies

Real estate-tech startup Zeus Living is shutting down due to financial struggles, The Information reported. The company raised around $145 million in VC funding from investors including Airbnb, Initialized Capital and SIG. Zeus was valued at $214 million in 2021.

Exits & IPOs

Singaporean fashion company Shein is seeking a valuation of up to $90 million in a potential US IPO, Bloomberg reported. The company is backed by investors including Sequoia, General Atlantic and Mubadala.

Fundraising

PSG reached a €2.6 billion close on its second European fund, which will target software and technology-enabled services companies.

IBM launched a $500 million fund to invest in enterprise AI startups, Axios reported.

Bison Ventures raised $135 million for its debut fund, which will invest in early-stage innovative science and deep-tech companies.

UK-listed asset manager Gresham House has raised just under £60 million. The new PE fund will provide capital to the firm's existing portfolio companies.

Investors

Ardian acquired a portfolio of LP interests in 20 North American and European PE funds from the Canada Pension Plan Investment Board for $2.1 billion.

Chart of the Day

Source: Q1 2023 Global Fund Performance Report (with preliminary Q2 2023 data)

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PitchBook News - Nothing is sacred as Carlyle cuts costs

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