Leon Gillespie

Great conversation yesterday at Preqin with Preqin's Cameron Joyce, CFA, CAIA, Blue Owl Capital's Cara Griffiths, Bain Capital's Tom Sargeant on the future of fundraising for private markets. Where will AUM come from going forward? What are the challenges that funds will face in fundraising? What strategies will be most popular going forward? It was fascinating to hear the perspectives of some of the industry's biggest platforms in Blue Owl Capital and Bain Capital from Cara and Tom, respectively, as to where fundraising is headed given their purview on the market and from Cameron on his data-driven insights from market research and plenty of numbers crunching on what it will take for private markets to grow to $30T AUM by 2030.

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Recent M&A market performance is showing significant signs of recovery from the lows of H2 2023, with the growth in PE and PE-backed deals leading the charge.

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It was great to get the investment in Stacatruc Limited completed. The first of many to come at YFM Equity Partners from Matt Gordon-Smith, with huge support from Callum Long. It took us longer to convince Matt Gordon-Smith to come and join us than it did for him to complete his first investment with us. Stacatruc is the 4th investment in the last 5 months - with another 6 in diligence across the business. We have a big team now though so plenty of capacity across all of our offices to talk about new opportunities. We can invest between £3m and £15m of equity. Either to fund a Change of Ownership when a business has £1m+ profit (MBO's, partial cash outs, carve outs etc), or Growth Capital to go faster when a business has £1m+ Revenue or ARR.

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Key Investment Highlights from The Seraphim Space Index Q2 2024 🌌 Let's take a closer look at the key highlights from the latest quarter: 💰 $8.5bn invested in TTM to Q2 2024 👩‍💻 174 deals in Q2 2024 🛰 $2.4bn invested in Q2 2024 🤝 385 deals in Q2 2024 compared to 320 in Q1 2024 🚀 Space Pioneer closed the biggest deal of $208m in Q2 2024 💲 Average deal size is $18m ◾ Median deal size is $5m in Q2 2024 Check out the full Index here - https://lnkd.in/d-vf-mVN

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Taavet Hinrikus and I made the Financial Times Due Diligence email. https://lnkd.in/ez2AuGQx One 'unintended consequence' is that if there is a 45% tax on carry and CGT (raising £40m per year, remember) it for all intents and purposes closes the door on new VCs in the UK. Especially started by teams from non-traditional backgrounds. To meet the GP commit, you need to be already part of the 'wealthy' as you cannot rely on the value you create - nearly half of it will disappear - to fund it. We have both had extremely successful startups which are few and far between. The smaller number of new VCs will therefore more likely increasingly be for people who have inherited the capital or can draw it from their already rich family. Probably not want they have in mind with this policy.

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Another wild day. 🙃😉🙃😉 4 new opportunities brought to our Operator Network cohort of PE, VC and Family Office clients. One is particularly interesting on a number of levels but largely because it’s a carve out of a £1bn+ Family Office portfolio…. £1.5m revenue D2C with 60% GMargin. Exceptional client list of MRR subscribers. Another opportunity involved an eco/retrofit business who have just done £1.8m revenue yr1 and growing to £8m yr2 with some cashflow finance required. There’s a £20m rev, £3m EBITDA specialist travel company raising £3m… Our vast community of Chairs and Non-Executives are plugged in to the SME deal-flow eco system. And guess what - these are largely completely “off-market”. Find out more at https://lnkd.in/eha-9Zxq #DealDirect #Virtualnonexecs

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Commentary picking up on the growing trade in GP partnerships (and the lucrative rewards for the lucky few). A consequence of the increasing maturity of this asset class. Market dynamics are evolving.

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Will There be a PE Deal Surge? The recent surge in private equity investments (up 28% yoy) has seen firms like Ares Management Corporation, Apollo Global Management, Inc., Blackstone, and KKR collectively deploying $162 billion in Q2, as highlighted in this Financial Times article. This uptick, as well as an expected wave of deal flow, is attributed to anticipated Federal Reserve rate cuts. The real dynamics might be more complex. I doubt the uptick in deal flow was driven by expectations of rate cuts. Instead, it may be some evidence of a broader recalibration of market valuations. More likely, it is the result of a strategic shift toward recession-resistant sectors like education or healthcare, which offers a target-rich environment in an industry that represents a fifth of U.S. GDP. The $9 billion buyout of R1 RCM by TowerBrook Capital Partners L.P. and Clayton Dubilier & Rice underscores this move to industries with enduring demand and logical valuations. It’s not just private equity; one of the largest IPOs this year was PE-owned Waystar, indicating the public markets also have significant interest in healthcare technology providers. But is a tsunami of deals really on the horizon? The article mentions PE firms’ struggles to return capital to LPs due to a depressed deal environment. This stagnation has been driven by PE firms’ reluctance to sell at earnings multiples that make sense given the current cost of debt. Even if the Fed cuts rates by 50 basis points and LBO borrowing costs drop accordingly, it’s doubtful this will raise multiples sufficiently to prompt PE firms to realize investments at their still lower-than-anticipated valuations. Hope springs eternal, carry is an option, and valuations are subjective enough that PE firms would prefer to hold their options, raise capital based on performance based on the marked valuations and aim to build more equity value than the 8% hurdle rate they are up against. Then compare their realized returns to their also low peer group when they fundraise. And do you know what does help to raise capital from LP's even in the face of low distributions? Beating the drum that there is a massive wave of dealflow coming. So, even with a rate cut, I wouldn’t expect to see a significant number of sales from seasoned PE portfolios this year. Bet on PE hold times setting records. Deal flow could increase, but it’s likely that the growth in deal flow will come from sources other than PE funds. What are your thoughts? Could a 50 bp move in September—or, if the market turmoil continues, from an emergency meeting later this month—sufficiently move multiples and reduce borrowing costs to drive PE shops to exit a large number of mature investments? Am I too cynical in my observation that PE firms proclaiming a 'wave' of dealflow is self-serving for their own fundraising needs?

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An underappreciated factor in UK VC right now, is the number of firms *only* investing in portfolio companies. ** The effect of funds, particularly the larger/later-stage funds, concentrating their funds on portfolio companies has a dramatic effect on the market. Because the new deals to later-stage funds, are likely the portfolio companies of earlier stage funds. And if the former falls/reduces/stops; the earlier stage funds have to devote more capital to their portfolio than was originally modelled. And it gums up the entire system. And it’s currently affecting all levels of funding, from growth down to seed stage funds. #founders #vcfunding #startups ** I’ve used ‘only’ as a catch all for 100% allocation to portfolio (as some funds are) through to significantly increased levels of portfolio funding (as the majority are).

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#Hargreaves_Lansdown Hargreaves Lansdown backed the £5.4 billion bid for the FTSE 100 fund manager today from a private equity consortium, a deal that will end its time as a listed company. The Bristol-based finance firm has been listed in London since 2007. It said today that the final offer valued its shares at 1140p in cash and would include a 30p per share dividend for the financial year which ended on 30 June. Compared to the Hargreaves Lansdown share price before the approach was first made in April, the price is at a premium of over 54%. The consortium is made up of CVC, Nordic Capital and ADIA. Hargreaves Lansdown is named after its founders – Peter Hargreaves and Stephen Lansdown – who set it up as an investment tip sheet. It now runs a state-of-the-art trading platform from which clients can run their own portfolios and pensions. https://lnkd.in/dKpizupy

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Global gender parity on Managing Director Level in Private Equity investing roles may take 62 years to achieve....🤯 The pipeline is there BUT....: globally, men in investing roles are about 50% more likely, on average, to be promoted than their female colleagues, a trend that persists across all levels in investing roles...😟 Women in PE cannot just sit and wait for the situation to improve - we need to act now! The opportunity is there: 🎤 Speak up, deliver, and don't be shy to talk about your achievements and successes 🤚 Actively ask for that (long overdue) promotion and be persistent (!) - support and coach other women and pave the way for them 💰 Negotiate your salary (everybody else does...) 🗣️ Be visible - speak at conferences and take a seat on panels - you have a lot to say 👩 Don't only be involved in womens' networks - get out of your comfort zone and actively involve yourselves in networks that are (still) predominantly male. Take a seat at these tables and involve yourselves in these discussions. Empower other women to do the same and facilitate access for them 🤝 Look for male allies and mentors (they are there - we all need to work together to drive change) 🚀 Diverse-owned PE firms outperform benchmarks - build your own diverse team and found your own firm! Be a catalyst for change! Sources: McKinsey & Company: The state of diversity in global private markets 2023 Examining the Returns 2023 - Further Evidence of Diverse-Owned Private Equity Firm Outperformance (National Association of Investment Companies, NAIC)

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For those that might be interested, we are running the following strategies with teams in both the UK and UAE: 1. Equity and Debt Advisory - Helping companies raise $5m-200m from global investors including VCs, growth funds, family offices, corporate ventures and sovereigns. Giving our investor partners access to the best global deals. We do all the heavy lifting for our corporate clients running their fundraising process and giving them access to global capital 2. Our co-investment vehicle (awaiting DFSA approval) - we put our money where our mouth is and co-invest with the globe's best investors. We will be fundraising for the fund for those interested (professional clients only) 3. Alternatives offering - access to global trophy assets globally. Previous allocations in SpaceX, Epic Games and Stripe. Many more in the pipeline with monthly access If you are thinking about raising money, looking for investment opps, need corporate advisory services (M&A, MBOs, buy and builds), looking at refinancings or debt options or selling your business please do get in touch. Our team is ex VC, family office, co-founders, big and small advisers, M&A professionals and fund managers so we have sat on both sides of the desk and can help accordingly

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Very much looking forward to joining the discussion and sharing the importance of embedded finance within our products. Embedded finance has the potential to revolutionise customer experience across a number of verticals, offering unparalleled convenience to keep up with evolving consumer expectations. #FTTEmFin #FintechTalents #embeddedfinance

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Excited for tomorrow's "Meet the Manager" webinar! If you're an investor interested in private equity secondaries, this is a must-attend event. Register now: https://lnkd.in/gRSwEnMy 👈 *For professional investors only. #privatequity #secondaries #dotinvesting #webinar

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M&A News: Interesting to see that Bain Capital has put in a bid of $1.83bn for automotive parts retailer, Bapcor, this is a $5.40 per share bid. This is a below fair value offer and at this time founders are not budging. Intersting to see though the shares leapt 14% on the news, clsoing at $4.97. WATCH THIS SPACE!! In other news: * Gina Rinehart sent Strike Energy shares soaring over 13% on Tuesday, with the iron ore queen reportedly eyeing a buyout of the now $615m company. The appealing control of Strike’s Western Erregulla operations has caught Ginas attention. The project is reportedly ready for a final investment decision in the third quarter and lacks assets with remediation liabilities. If WA Premier Roger Cook approves onshore gas exports, Rinehart could turn her modest holding into a significant gas empire.  * Fashion startup The Daily Edited, has emerged from VA following the execution of a DOCA to secure the business. The business will now stay online and jobs where possible will be saved. * Swoop Holdings has sold its wholesale voice business, VoiceHub, to Gold Coast-based telco Pivotel for $9m. * Canada Pension Plan Investment Board, Blackstone, and an IFM Investors and DigitalBridge partnership have submitted non-binding indicative offers for AirTrunk.  * Farm Pride Foods is cutting costs and expediting a $6.17m capital raising due to the impact of Avian Influenza on its Victorian sites. * Harrison.ai, an AI start-up backed by Sonic Healthcare and Ramsay Health Care, is preparing for a $100m-plus Series C funding round and has begun discussions with potential investors. Lots to watch out for! #mergers #acquisitions #womeninfinance #business #DOCA #fashion #finance

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#PE Sentiment among PE dealmakers rose in Q1 due to more macro clarity, increased visibility into interest rates and a perceived valuation gap. Though tech still dominates sectors, its investment percentage of total deployment dipped slightly in the last 12 months. Rising activity in coming quarters will be boosted by greater availability of financing. https://lnkd.in/dNY7zD2E

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UK Cleantech VC panel takeaways Oh the joy of hosting a panel with the experience and gravitas to speak unequivocally! Great job, Avent Bezuidenhoudt, Rowan Bird, Sarah Mackintosh We focused on the UK’s strengths (which don’t need repeating) and some ideas for improvement, which really do. What does UK cleantech need? - UK policy stability (maybe years, not months) - policy credibility - dialogue between policy and climate tech: collaboration beats distrust - policy priority on outcomes - continued financial innovation, especially around hardware, manufacturing, working capital, FOAK - blended finance that crowds in, not crowds out - more targeted collaboration from industry (pilot projects are a mixed blessing) - better relations with Europe To achieve our (government mandated) obligation to net zero, cleantech VC is not asking for stimuli or subsidies, but for government consistency. It’s Kafka-esque, yet an extraordinary statement of strength. #venturecapital, #cleantech, Rishi Sunak, Liz Truss, Cleantech for UK, Solar Energy UK, BGF, Department for Energy Security and Net Zero

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The investment activity in US VC de-coupled from the positive development of the Nasdaq index over the last two years. Is it time to close the gap? 🚀 Please find more information here and would be great to receive your thoughts in the comments below. https://lnkd.in/ekCUpUUM

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