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The Daily Pitch: VC

December 13, 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:

How tough would it be for real assets returns to rebound by year's end?

Our latest analyst note examines the growth of the NAV lending market and the pluses and minuses of such loans

LPs chasing market stability are turning to Japan's private markets

Newly public companies are set to cap an uncertain year on a high note, our indexes show

Our market map shows where VCs are placing their bets on the startups taking on traditional banks

Today's Top Stories

Navigating the ups, downs of NAV loans

As fundraising slows and exits stagnate, PE fund managers are increasingly employing creative portfolio management strategies.

Net asset value loans, which are credit facilities secured against a fund, have become one of the financing tools filling the demand for liquidity. The NAV loan market is forecast to grow sixfold to $600 billion by 2030.

Our latest analyst note examines the growth of the NAV lending market and the pluses and minuses of such loans.

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Landscape looking frosty for real assets fundraising

Capital raising for real assets funds has been far from fertile in 2023, which is shaping up to be the weakest year for fresh capital in over a decade.

Data through Q3 shows just $24.4 billion committed this year to closed-end real assets funds—down nearly 80% from the same period in 2022. By contrast, natural resources fundraising, which includes oil and gas, surpassed 2022's annual total.

The latest edition of our Global Real Assets Report also looks into the dip in the strategy's recent returns—and the likelihood they could recover by the end of the year.

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A message from McDermott Will & Emery

Join healthcare, life sciences and PE leaders at the McDermott and EY Forum

Headed to San Francisco for the 2024 J.P. Morgan Healthcare Conference? Don't miss the McDermott and EY Forum on January 9 at the Ritz-Carlton! Join top executives, innovators and investors to connect and forge new partnerships.

Hear predictions for the coming year and forecasts for hot investment opportunities in the competitive deal market.

Don't miss this opportunity to network with key decision-makers who are driving healthcare's most significant transactions and transformative partnerships.

Register today

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Investors turn to Japan for Asia-Pacific exposure

(Jackyenjoyphotography/Getty Images)

Limited partners chasing market stability are looking to invest in Japan's PE and VC ecosystems.

The country's relatively stable government policies against a backdrop of US and China tensions, paired with an aging population with business owners in need of succession planning, have fostered an environment primed for foreign investor participation in private market deals.

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Market rally sets PE, VC IPOs up for double-digit gains in 2023

Newly public companies have benefited from the recent rally in US stocks, capping an up-and-down year on a high note, according to PitchBook's IPO indexes.

Our VC-backed IPO index is up 15.4% through early December. The PE-backed IPO index has grown 14.7% in 2023.

Companies that went public through SPACs, however, declined 12.8% during the period.

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Market Map: Struggling retail fintech gets a hand from alternative lending

(Tanja Ivanova/Getty Images)

Retail fintech has been losing ground to B2B-centric enterprise fintech. The former, despite a slowdown with consumers and investors, is being buoyed by alternative lending startups that offer loans to credit-underserved communities.

Our market map shows where investors are placing their bets on startups taking on traditional banks.

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Public GPs raise more money for private credit than they can deploy

The top alternative asset managers are awash in capital committed to private credit strategies. Recently, private credit's share of overall fundraising surged at the biggest public PE firms, but lending volumes are tracking down 33% this year during a slump in dealmaking.

Our Q3 2023 US Public PE and GP Deal Roundup checks the vital signs that many Wall Street analysts miss on the seven largest US-listed alt managers: Blackstone, KKR, Apollo Global Management, Blue Owl, The Carlyle Group, Ares Management and TPG. 

For these bellwether firms, shoring up dry powder for private credit is just one of many strategies—including blockbuster deals with insurers—to sustain long-term growth.

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Since yesterday, the PitchBook Platform added:

2057

People

579

Companies

36

Funds

See what our data software can do

The Daily Benchmark:
2018 Vintage Global PE Funds

Median IRR

20.01%

Top Quartile IRR

30.43%

0.30x

Median DPI

Select top performers

Farol Fund II

SSC Partners I

LVC USD Fund I

*IRR: net of fees

161 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

True Anomaly, an aerospace security startup, has raised a $100 million Series B led by Riot Ventures.

Shiprocket, an Indian provider of ecommerce logistics and shipping software, is in talks to raise up to $100 million in a round led by Tribe Capital, TechCrunch reported.

Germany's Tacto has raised €50 million in a round led by Sequoia and Index Ventures for its AI-based operating system for supply chains.

Jitjatjo has raised a $30 million Series B led by Morningside Technology Ventures for its gig marketplace.

Quaise Energy, a geothermal energy startup, has raised $13 million of its $25 million goal for its latest funding round.

New York-based sustainable jet fuel startup Dimensional Energy has raised a $20 million Series A led by Envisioning Partners.

French B2B deferred payments provider Aria has secured €15 million led by 13books Capital.

SCIL Nanoimprint Solutions, a Dutch developer of nanofabrication technology, has received €10 million in a round led by Imec.xpand.

Spore.Bio has raised an €8 million pre-seed investment led by LocalGlobe. The Paris-based company develops a real-time pathogen detection device for factories.

Germany's Nuvo, which provides AI-powered data onboarding solutions, has received €3 million led by La Famiglia.

PE Deals

KKR is in talks to acquire a 50% stake in Cotiviti from Veritas Capital, Bloomberg reported, in a deal that would value the software provider at up to $11 billion.

TA Associate and Warburg Pincus completed their purchase of Helsinki-based Epassi Group Exercite from Waterland Private Equity.

Clubs from Germany's top-flight soccer leagues have agreed to allow PE investment following previous failed attempts. The Financial Times reported that Advent International, Blackstone, CVC Capital Partners and EQT have all made offers for an almost 10% share of broadcast and commercial rights in Bundesliga and Bundesliga 2.

The PE arm of Fremont Group, the Bechtel family office, acquired Pennsylvania-based Hunter Truck, a group of commercial truck dealerships.

Nova Infrastructure acquired A&R Bulk-Pak, a South Carolina-based provider of supply-chain services to the petrochemical industry.

Exeter Street Capital Partners acquired a majority stake in Colorado-based Creative Learning Systems, also known as SmartLab, through a recapitalization transaction.

Exits & IPOs

Bain Capital agreed to sell wind turbine operator Japan Wind Development to Tokyo-based infrastructure services provider Infroneer for 203.1 billion Japanese yen (roughly $1.4 billion).

Fundraising

Singapore-based Seraya Partners raised $800 million for an Asian infrastructure fund that targets middle-market investments related to digital infrastructure and the energy transition.

French early-stage VC firm Axeleo Capital closed its B2B technology fund on €73 million.

Investors

New York-based General Atlantic has confidentially filed with the SEC to pursue an IPO, the Financial Times reported. The step is said to be preliminary, and a listing is not expected to be imminent, according to the report.

Chart of the Day

Source: Q3 2023 European PE Breakdown

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