Why asset managers want to do everything

Plus: Healthtech unicorns pile up, will Europe's venture winter thaw? & more
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The Weekend Pitch
January 21, 2024
Presented by Masterworks
(Jenna O'Malley/PitchBook News)
BlackRock's latest infrastructure play is another (supremely large) tension rod supporting the leading asset manager's ever-expanding bridge. Destination: everything.

In mid-January, private market giant BlackRock agreed to acquire Global Infrastructure Partners, a fund manager that specializes in the energy, transport, digital, water and waste sectors and touts around $100 billion in AUM.

The firm's strategic infrastructure acquisition signals mounting interest in the asset class as well as a concerted effort among GPs to expand the capabilities of their firms in response to LP demand for one-stop shop asset managers.

BlackRock will pay around $12.5 billion in cash and stock for GIP's book, swelling its infrastructure business to $150 billion and marking the firm's largest acquisition since it purchased Barclays Global Investors in 2009.

The acquisition is a monumental example of private equity's deepening foothold in infrastructure, and BlackRock isn't alone.

This is the Weekend Pitch, and I'm Jessica Hamlin. You can reach me at jessica.hamlin@pitchbook.com or @jessicaAhamlin on X.
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Trivia

(ilbusca/Getty Images
Just like in the US, European VC deal value took a tumble in 2023, falling 45.6% year-over-year. How much value did European VCs generate in 2023 according to our latest Annual European Venture Report?

A) €76.8 billion
B) €57.1 billion
C) €69.2 billion
D) €49.6 billion

Find your answer at the bottom of The Weekend Pitch!
 

European PE's better-than-expected 2023

European PE turned in a stronger performance last year than many would have predicted.

However, dig into the details and it is a story of haves and have-nots. Add-ons drove increased deal count while mega-deals disappeared, and mega-funds raked in capital while smaller managers struggled to secure funds.
 

A unicorn pileup

(Xsandra/Getty Images)
Fifty-two healthtech unicorns were minted in 2021 and 2022 combined, but rapidly shifting market conditions prevented many of them from successfully going public or seeking other exit opportunities.

Our analysts estimate there is a total backlog of roughly 70 healthtech unicorns, but can they adapt to the market's changing demands?
 

When will the chill end for Europe's VC market?

Despite signs of improvement cropping up throughout Q3, a downturn in dealmaking during the last quarter of the year cast doubt on when Europe may recover from the venture winter.

But there is still resilience in the market. Europe still saw its third-highest year on record for deal value—evidence of long-term structural growth that still remains—and experienced firms gained a larger share of LP capital in terms of fundraising.
 

Quote/Unquote

(ilbusca/Getty Images)
"We could see increased competitive tension as more players chase fewer deals. The market conditions will test how serious banks really are."

—Alex Robb, a partner at law firm Ropes & Gray, on the outlook for banks entering the private credit marketplace.
 

Stay tuned

Keep an eye out for these insights and research reports coming out this week:
  • 2023 Annual Global M&A Report
  • Fintech: State of the Industry
  • Biologicals Bring Nature Back to Agriculture
  • Q4 2023 Medtech Public Comp Sheet and Valuation Guide
  • Q4 2023 Healthcare Services Comp Sheet and Valuation Guide
 

Trivia

Answer: B)

VC deal value in Europe landed at €57.1 billion, a 45.6% decline year-over-year. You can read more about the trends behind the decline in our 2023 Annual European Venture Report.

This edition of The Weekend Pitch was written by Jessica Hamlin, Jacob Robbins, Leah Hodgson and Marie Kemplay. It was edited by Heather West and Samantha Steele.

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