PEI Awards 2015: Americas winners

LARGE-CAP FIRM OF THE YEAR IN NORTH AMERICA
1. The Blackstone Group
2. Warburg Pincus
3. KKR

The cash-raising behemoth The Blackstone Group had a major fundraising year in 2015. It closed its Blackstone Capital Partners VII on $18 billion, surpassing its $17.5 billion hard-cap with an additional $500 million commitment from the firm and its employees.

It also finished fundraising for its latest energy fund, Blackstone Energy Partners II, on its $4.5 billion hard-cap, with demand from existing and new investors exceeding that amount. Its total dry powder for the year soared to $85 billion. If it completes its transaction with BioMed Realty Trust for around $8 billion this month as expected, it will mark the largest private equity deal from last year.

“[Blackstone] generated $11.5 billion of liquidity for investors through sales and IPOs of our portfolio companies, and selectively invested in high quality companies in a tricky investing environment,” Blackstone global head of private equity Joseph Baratta told Private Equity International.

MID-MARKET FIRM OF THE YEAR IN NORTH AMERICA
1. Partners Group
2. Thoma Bravo
3. The Riverside Company

The global asset manager kept busy in 2015 with plenty of deals in its pipeline in North America. Partners Group kicked off the year with the acquisition of metal components manufacturer Dynacast International at an enterprise value of $1.1 billion.

Joel Schwartz, the firm’s head of private equity in the Americas, told Private Equity International: “[Last year] was a standout for our private equity business in North America. Not only did we close a series of notable acquisitions, including Dynacast, KinderCare Education and Pacific Bells, but we were also able to secure strong exits for our investments in Universal Services of America and Nobel Learning.”

It also entered defined contribution markets in 2015 to open the doors of private equity to retail investors. It launched its US fund in August and had secured its first client for the vehicle by year-end.

LIMITED PARTNER OF THE YEAR IN NORTH AMERICA
1. CDPQ
2. University of California Regents Endowment Fund
3=. Alameda County Employees’ Retirement Association
3=. Rhode Island State Treasury

CDPQ is 18 months into a five-year plan to grow its illiquid private equity and infrastructure assets from $35 billion to $50 billion, allocating up to $8 billion per year to both asset classes.

In 2015 CDPQ created an innovative partnership with Mexican pension funds. This partnership would allow CDPQ to invest more than $2.1 billion in Mexican opportunities over the next five years.

The Canadian firm, led by president and CEO Michael Sabia, began its direct investment programme before it began allocating to funds; as of May it was investing around $26 billion in private equity, of which $9 billion went to funds and $17 billion to direct investments.

“We are at a unique moment in time where the few institutions with the size of balance sheet, the time horizon and the capabilities to execute smart transactions will emerge as important players in the private equity landscape,” Andreas Beroutsos, executive vice-president of private equity and infrastructure, told Private Equity International last year.

In August, CDPQ bolstered its US private equity team by hiring Sanjay Gupta from Adveq for the newly-created position of senior director in New York.

CO-INVESTOR OF THE YEAR IN THE AMERICAS
1. Canada Pension Plan Investment Board (CPPIB)
2. CDPQ
3. Hamilton Lane

Canada’s largest federal public pension fund stayed active in the co-investment realm throughout 2015. The Canada Pension Plan Investment Board (CPPIB) teamed up with BC Partners and other co-investors to commit a total of about $1 billion to multinational cable and telecommunications company Altice, which proposed an acquisition of Cablevision Systems Corporations. It also joined forces with CVC Capital Partners to acquire Petco for $4.6 billion.

“In 2015, our PE fund partners continued to offer to us a large number of well-researched investment opportunities,” CPPIB global head of investment partnerships Pierre Lavallée told Private Equity International. “Our partners tell us they value our long-term commitment to the asset class and our reliability as an investment partner.”

Earlier in the year, CPPIB partnered with Permira to take Informatica Corporation private for about $5.3 billion, the largest leveraged buyout for 2015 at the time, beating a rival bid from Thoma Bravo and the Ontario Teachers’ Pension Plan.
As of 30 June, the $200 billion-plus pension fund had six co-investments in companies based in North America.


NORTH AMERICAN DEAL OF THE YEAR
1. Heinz (3G Capital/Berkshire Hathaway)
2. Cirque du Soleil (TPG, Fosun, CDPQ)
3. Informatica (CPPIB, Permira)

In a tasty merger between two food giants, 3G Capital partnered with Warren Buffet’s Berkshire Hathaway to create Kraft Heinz Company. The merger, which took two years to close, marked the sixth largest private equity deal in 20 years. The result was the creation of the third largest food company in North America, after Coca Cola and PepsiCo, and the fifth biggest in the world. The merger was worth $27.5 billion, slightly above the $23 billion the pair had paid for the acquisition of Heinz two years earlier.

Through this deal, 3G co-founder Alex Behring became chairman of the Kraft Heinz board, with Buffett as a board director. The incumbent Heinz chief executive Bernardo Hees, a Brazilian economist and businessman, became CEO of the new company.

Following the merger, Kraft stopped trading on the NASDAQ as Kraft Heinz began trading its common shares and paid stockholders a 55 cent cash dividend per share.

NORTH AMERICAN EXIT OF THE YEAR
1. Freescale Semiconductor (The Blackstone Group, The Carlyle Group, Permira, TPG)
2. Petco (TPG, Leonard Green)
3. IDC (Silver Lake, Warburg Pincus)

The marriage between private equity and Freescale Semiconductor was a long and twisted one marked by many ups and downs. Although The Blackstone Group, The Carlyle Group, Permira and TPG, which purchased the company in 2006 for $17.6 billion, showed a loss on paper when the company went through an initial public offering in 2011, they held onto the stock. After a troubled hold in a highly cyclical sector, the private equity firms surprised many by getting out with their money back in a 2015 deal worth $16.7 billion, including debt.

The acquisition of Austin-based Freescale Semiconductor by Netherlands-based NXP Semiconductors, a transaction valued at nearly $12 billion excluding debt, turned out to be the largest private equity tech-related exit of 2015 and the largest semiconductor deal since 2006. The merger was announced in March and completed in November.

SECONDARIES FIRM OF THE YEAR IN THE AMERICAS
1. Ardian
2. Lexington Partners
3. Strategic Partners

Think secondaries and it’s hard to get past Ardian. The Paris-headquartered fund of funds is active in almost every alternative assets space and it’s not hard to see why they clinched the top spot for secondaries firm of the year in both the Americas and Europe. Ardian completed more than $5 billion in secondaries deals last year and emerged as the buyer in some of the biggest deals from 2015.

Ardian provided around $250 million of liquidity to limited partners in a tender offer process in Kelso & Co’s eighth fund and opened an office in San Francisco, in addition to expanding its New York presence.
“It’s in our DNA to work on these large and complex transactions,” said Benoît Verbrugghe, head of Ardian US. “The second half of 2015 was very active and we were able to clinch several transactions with a pension fund, a sovereign wealth fund and a financial institution.”

SECONDARIES DEAL OF THE YEAR IN THE AMERICAS
1. CalPERS real estate interests (Strategic Partners)
2. Adams Street Partners/Strategic Partners
3. Irving Place Capital

A quick search for the biggest secondaries deals of last year and one thing’s apparent: real estate secondaries dominated the field. Secondaries deal volume in the asset class hit $8.2 billion, according to Landmark Partners, with around a third of that driven by the California Public Employees’ Retirement System’s (CalPERS) $3 billion sale of a portfolio of real estate stakes to Strategic Partners.

Everything about this deal involves superlatives. CalPERS, the US’s largest pension, brought real estate fund stakes to market in the biggest secondaries deal ever, with the secondaries unit of Blackstone, now the largest owner of real estate in the world, picking up the stakes.

“The key thing about the CalPERS deal is that it was global, diversified and with quality GPs and underlying assets,” a spokesman for Strategic Partners said, adding that the unit marked its 900th deal last year and has closed more than 100 transactions in real estate.


SECONDARIES ADVISOR OF THE YEAR IN THE AMERICAS
1. Credit Suisse
2. Park Hill
3. Evercore

GP-led restructurings and liquidity solutions were on everyone’s lips in 2015, and for Credit Suisse, it is its bread and butter. Such deals accounted for up to 70 percent of the secondaries advisory team’s business in the Americas last year, with such transactions set to increase.

This is the second year in a row the group has won in the Americas, a region that accounted for about half the 25 deals the private fund group closed globally in 2015. What is it about Credit Suisse’s approach that allows them to close every deal they take on? “We like to roll up our sleeves to evaluate all transaction objectives, as we have to be selective with deals we will pursue,” said Mike Custar, global head of secondary advisory at Credit Suisse.

Credit Suisse’s corporate finance approach to secondaries advisory gives it a competitive edge, and with the GP-led space rising to account for about 25 percent of the secondaries market globally from about 20 percent in 2014, the firm’s year ahead is certainly one to watch.

SPECIAL SITUATIONS/TURNAROUND FIRM OF THE YEAR IN NORTH AMERICA
1. KKR
2. Marlin Equity Partners
3. KPS Capital Partners

KKR, the 40-year-old investment powerhouse, launched KKR Special Situations Fund II as the new year began, looking to raise a total of $3 billion, beyond the $2 billion it raised in January 2014 for its debut global special situations fund. Run by Nat Zilkha in London and Jamie Weinstein in San Francisco, the team also includes professionals in New York and Sydney.

The fund pursues three main investment strategies: rescue lending, distressed for control deals and secondary market distressed purchases. The vehicle held a first close on $1.7 billion in April, and has already made several investments, including leading the asset-backed $175 million securitisation of Avant Loans alongside Victory Park Capital.

Special Situations II is still in fundraising mode, having recently secured a $150 million commitment from the South Carolina Retirement System Investment Commission.

DISTRESSED DEBT FIRM OF THE YEAR IN NORTH AMERICA
1. Apollo Global Management
2. Oaktree Capital Management
3. Cerberus Management

In 2015, Leon Black’s Apollo Global Management was busy on the fundraising trail. It closed its third structured credit fund, Apollo Structured Credit Recovery Fund III, on $1.237 billion, raising 10 times the amount of assets the firm landed for its predecessor vehicle.

That fund invests primarily in collateralised loan obligations, collateralised debt obligations, various tranches of residential mortgage-backed securities (MBS), commercial MBSs and other asset-backed securities. Last year, the firm also launched the Energy Credit Opportunity Fund to invest in less liquid or illiquid products in energy industries.

Apollo has clearly emerged as a significant player in the credit arena in recent years, with more than $112 billion under management in that business segment as of August, trumping its nearly $40 billion assets under management in the private equity segment.

FIRM OF THE YEAR IN CANADA
1. Onex
2. KERN Partners
3. Fonds de Solidarité FTQ

After delivering record realisations of $6.1 billion in 2014, Canadian private equity firm Onex continued its strong streak in 2015.

It completed five acquisitions through its Onex Partners IV, investing a combined $1.9 billion of capital. In March, the firm backed survival equipment business Survitec Group and packaging products and services business SIG Combibloc. Onex went on to back Jack’s Family Restaurants and Schumacher Clinical Partners in July.

Onex also exited Tropicana Las Vegas, realising $230 million, in August, and entered an agreement to exit call centre operations company Sitel Worldwide, which it took private in 2007 for $400 million.

In June it upped its commitment to Onex Partners IV by $500 million to $1.7 billion, bringing the fund total size to $5.7 billion. As of 30 September, Onex’s fourth fund had generated a 12 percent gross IRR, before carried interest and management fees and expenses.

FIRM OF THE YEAR IN LATIN AMERICA
1. Advent International
2. The Abraaj Group
3. The Axxon Group

Advent International actively deployed capital in Latin America last year, picking up minority stakes in diagnostic services provider Fleury, and in frequent flyer programme LifeMiles from its parent company Avianca. It also acquired higher education company Faculdade da Serra Gaucha and a stake in Mexican bank Grupo Financiero Mifel.

“Last year was among our most active in our 20-year history of investing and building value in Latin America,” said Patrice Etlin, managing partner at Advent.

“We executed eight transactions in the region, which included investing over $600 million in five new businesses and two follow-ons in existing portfolio companies, and completing one exit. Additionally, in 2014, we raised the largest private equity fund ever in Latin America. We are very proud of our achievements in the past few years and look forward to 2016.”

FUND OF FUNDS MANAGER OF THE YEAR IN NORTH AMERICA
1. Aberdeen Asset Management
2. Neuberger Berman
3. Hamilton Lane

Aberdeen Asset Management’s acquisition of US-based FLAG Capital Management in late August quietened voices in the market bemoaning funds of funds and shouted loudly in favour of those that see increased client demand for diversification and fund of funds offerings.

The completion of the acquisition added a wealth of private equity resources and expertise in North America to the firm, as well as £4.4 billion ($6.4 billion; €5.7 billion) of private equity and real estate assets to its £284 billion of assets under management, as of 30 September 2015. Its total private equity assets stood at £9 billion.

The US private equity team, led by Scott Read, confirmed its pole position as a leading North American player by reaching final close in October on Aberdeen US Private Equity VI. The fund closed on $295 million, overshooting its target by 30 percent. The first to close since the FLAG acquisition, it was oversubscribed within about four months of its launch.

PLACEMENT AGENT OF THE YEAR IN NORTH AMERICA
1. Mercury Capital Advisors
2. Eaton Partners
3. Park Hill

Mercury Capital Advisors kept busy in 2015, working on 12 fundraisings in North America targeting more than $9 billion in aggregate capital commitments. These funds have closed on over $3 billion to date. One of the funds it is working on is in Latin America, targeting $350 million; the vehicle has closed on $230 million of commitments from investors.

“While 2015 was a great year, 2016 will be both great and challenging,” a Mercury spokesman told Private Equity International. “Great in that investors are capitalised and backing strong managers, like Nautic; challenging in that LPs are also cautious, given market volatility and the pullback in China.”

Nautic Partners’ Fund VIII closed on its hard-cap of $900 million in January after just three months of formal fundraising. Earlier in the year, in July, Mercury advised on US Farm Trust’s $300 million inaugural vehicle and raised a club deal with two Canadian investors, among other commitments.


LAW FIRM OF THE YEAR IN NORTH AMERICA (FUND FORMATION)
1. Kirkland & Ellis
2. Debevoise & Plimpton
3. Clifford Chance

This is Kirkland & Ellis’s third year as the winner of Private Equity International’s Law Firm of the Year award in Fund Formation for North America, and it’s no secret why. 

To say the group, led by John O’Neil, was busy in 2015 would be an understatement. Kirkland is currently providing their expertise to 350 fundraises, representing some 275 unique sponsors and exceeding $290 billion in total commitments.

It’s hard to choose which of the many mammoth fundraises to highlight, but in 2015 some key formations included the $12 billion Warburg Pincus XII, which held a “one and done” close after just six months in market, one of the largest single closings in private equity history, the $5.6 billion Starwood Opportunity Fund X and the $2.25 billion Audax Private Equity Fund V.

LAW FIRM OF THE YEAR IN NORTH AMERICA (TRANSACTIONS)
1. Debevoise & Plimpton
2. Skadden, Arps, Slate, Meagher and Flom
3. Ropes & Gray

After winning the top spot in this category back in 2013, Debevoise & Plimpton is back with a vengeance and a long list of impressive transaction work.

In 2015, the firm represented 16 private equity clients in 29 announced transactions. Notably in June, Debevoise represented Canada Pension Plan Investment Board in the complicated multi-jurisdictional acquisition of GE Capital’s sponsor lending business, including Antares Capital, for a total consideration of $12 billion. They also advised Morgan Stanley Global Private Equity and Creative Circle in the $600 million sale of Creative Circle. Other top clients in 2015 transactions included Apollo Global Management, CD&R and the Ontario Teachers’ Pension Plan.

LENDER OF THE YEAR IN NORTH AMERICA
1. Ares Management
2. GSO
3. Golub Capital

Despite the sale of GE’s sponsor business to Canada Pension Plan Investment Board in early summer, Ares Management, which had a joint venture with GE Capital through the Senior Secured Loan Program fund, landed its largest deal ever in August with the help of 30 other lenders, providing $800 million refinancing and debt write-down to Bregal Partners-backed American Seafoods. The $9.2 billion business development company plans to retain between $100 million and $200 million of the loan and to syndicate the balance, earning $8 million to $9 million in fees.

Ares also kept busy at the end of the year, striking up a new joint venture with Varagon Capital Partners as it sees increasing potential in larger syndicated lending. The senior lending programme is now the firm’s new joint venture with Los Angeles-based Varagon.