Private capital funds regain some footing

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The Daily Pitch: VC

May 7, 2024

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

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

Private investment funds regained some footing in Q3, but strategy performance varied widely, our Global Fund Performance Report shows

Our latest market map dives into ecommerce's prepurchase segment

Our analysts find the top emerging fund managers can offer higher upside potential than established firms

Today's Top Stories

PE, debt pull fund performance further into positive territory

Some private investment funds found firmer footing at the end of Q3 2023, but the story varied significantly by strategy, data from our latest Global Fund Performance Report shows.

The good: Private equity led with a 10.4% one-year IRR, followed by private debt at 9.8%. Real assets notched 8.4% in the period, helped by steady returns in infrastructure funds.

The bad: VC remained a laggard with a -7.7% one-year IRR as the IPO market stayed quiet. Real estate recorded a -2.6% return, hurt by distress in the office and multifamily sectors. Funds-of-funds, whose performance tends to trail behind other strategies by a quarter or two, came in at -2.1%.

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Market Map: Ecommerce plots a comeback with 'prepurchase' startups

(Alistair Berg/Getty Images)

After record growth, ecommerce dealmaking has slowed down substantially. Hoping to turn the tide and attract more spending, investors are betting on startups working in the prepurchase space. These companies connect consumers to new products and offerings.

Our latest market map highlights the key players and segments that investors are betting on.

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Measuring VC's role in quantum sensing

Quantum sensing offers a way to measure the world with unparalleled precision. The sector is coming of age—going beyond atomic clocks to measure everything from chemical signals to gravitational fields, according to our recent Emerging Space Brief.

The most pressing applications are in areas like defense and medicine, where high-fidelity sensors can be a matter of life and death. The analyst note covers opportunities, limitations and recent VC dealmaking in the space.

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Since yesterday, the PitchBook Platform added:

30

VC valuations

1944

People

714

Companies

23

Funds

See what our data software can do

The Daily Benchmark:
2020 Vintage North American Debt Funds

Median IRR

11.34%

Top Quartile IRR

15.12%

0.25x

Median DPI

Select top performers

ALTUMCK-19

Onex Senior Loan Opportunity Fund I

Castlelake V Dislocated Opportunities

*IRR: net of fees

67 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Colbeck Capital Management hired Jared Talisman as managing director and head of originations. Talisman was formerly managing director at Principal Alternative Credit.

VC Deals

Stonal, a Paris-based data management startup for the property industry, has secured a €100 million investment from proptech SaaS provider Aareon.

B2B payments startup Jeeves has secured a $75 million credit facility from Community Investment Management.

Diamond and gemstone marketplace Nivoda has raised a $30 million Series B led by Avenir Growth, Axios reported.

Inkbit, an advanced manufacturing solutions startup, has secured a $19 million investment led by Ingersoll Rand.

Cybersecurity startup Anetac has emerged from stealth, raising $16 million from Liberty Global.

AI healthcare platform startup Opmed.ai has raised a $15 million Series A from NFX, Grove Ventures, Secret Chord Ventures and others.

PE Deals

The Canada Pension Plan Investment Board and Global Infrastructure Partners agreed to a $6.2 billion take-private deal for Minnesota-based energy company Allete. The all-cash deal, which includes debt, values Allete at a 19% premium to its share price on Dec. 4, 2023, when news of the potential sale was first reported.

Swedish PE firm EQT agreed to pay $3 billion in cash for Perficient, a digital consultancy based in St. Louis. The deal represented a 51% premium to the company's recent average share price.

Brookfield Asset Management plans to purchase a 51% stake in the fee-related earnings of Castlelake, an asset-based private credit firm. The approximately $1.5 billion deal includes investment in Castlelake's funds and strategies.

Lower-middle-market firm L2 Capital acquired Kosmos Q, a direct-to-consumer barbecue brand based in Oklahoma City. Scott Jensen, who co-founded Stubb's BBQ, was appointed CEO of Kosmos.

Wynnchurch Capital acquired Reagent Chemical and Research, a New Jersey-based distributor of hydrochloric acid.

Blackstone is in advanced talks to acquire a majority stake in Priority Software for up to $500 million, Calcalist reported. The Israeli business management software company is owned by TA Associates and Fortissimo.

Exits & IPOs

Chinese electric carmaker Zeekr, a subsidiary of Geely, plans to raise up to $367.5 million at a valuation as high as $5.1 billion in its upcoming IPO, Bloomberg reported.

Swiss drugmaker Novartis agreed to buy radiopharmaceutical company Mariana Oncology for $1 billion, with up to $750 million in additional milestone payments. Massachusetts-based Mariana was last valued at $314 million in 2023 and is backed by Deep Track Capital, Forbion and RA Capital Management, among others.

Chinese self-driving car company Beijing Momenta Technology has filed confidentially for a US IPO, Bloomberg reported. The company has raised $1.25 billion from investors including GM, Toyota and Temasek.

Docusign, the online document signing and management giant, agreed to purchase AI document management software startup Lexion for $165 million.

Fundraising

Late-stage investment firm Iconiq Growth has raised $5.75 billion for its fifth flagship fund, TechCrunch reported.

Florida-based middle-market PE firm Palm Beach Capital raised $350 million for its sixth fund. The firm does buyout and growth equity deals in engineering services, logistics and healthcare, among other sectors.

Saga Ventures, a firm helmed partially by Sam Altman's brother, Max Altman, has raised $125 million to invest in startups founded outside of Silicon Valley.

River SaaS Capital has raised $50 million for its TruWest Fund I, which will target B2B SaaS businesses.

Chart of the Day

Source: PitchBook's Q1 2024 Global M&A Report

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