Private Equity News & Analysis

Side Letter: Blackstone, Apollo earnings; STIC’s hard-cap; Liverpool’s impact play

Key third-quarter highlights from private equity's listed giants. Plus: Korea's STIC has upped its pan-Asia hard-cap ahead of backdoor listing and Australia's Liverpool Partners wants to make a multi-asset impact. Here's today's brief, for our valued subscribers only.

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They said it

“Please don’t roll your eyes if I bust you. I’m taking this seriously.”

In an internal memo, Partners Group chief David Layton tells staff to avoid using the term ‘deal’ when referring to their ownership of assets or risk being fined, the Wall Street Journal reports.

Just happened

John Gray, Blackstone

Earnings cheat sheet
It can be tricky to keep track of every private equity firm’s highlights during earnings season. Have no fear: Side Letter has collated this handy list of takeaways from our coverage of Blackstone and Apollo Global Management‘s Q3 results last week:

Blackstone (PEI‘s report here)

  • Nearly half of Blackstone’s $148 billion in inflows over the last 12 months – $47 billion in the third quarter alone – was perpetual. Key drivers included real estate and infrastructure.
  • The firm’s overall AUM increased 25 percent year-on-year to an industry record of $731 billion.
  • It deployed $37 billion across strategies in the third quarter, with an additional $30 billion committed.
  • The firm’s next secondaries flagship, Strategic Partners Fund IX, is on track to reach a record $20 billion, having held an $8 billion interim close a few weeks ago.

Apollo Global Management (PEI‘s report here)

    • The investment giant is targeting at least $80 billion of fresh capital next year, including its 10th flagship PE fund.
    • Apollo expects capital from its wealth channel – which includes private bank relationships, family offices and registered investment advisers – to grow from 5 percent of AUM today to 30 percent or more.
    • It will consider scaling up in areas such as growth equity, its secondaries-focused GP solutions unit and energy transition.

Keep an eye out for Ares Management and Carlyle Group‘s Q3 earnings results later this week.

A STIC-ing point?
Korea’s STIC Investments has increased the hard-cap on its second pan-Asian growth fund, PEI reports this morning. STIC can now raise up to 550 billion won ($466 million; €401 million) for Asia Growth Fund II, which would represent a 74 percent increase from its 2018-vintage predecessor. Increasing a fund’s hard-cap mid-raise isn’t an every day occurrence, as it typically requires LP approval. It’s also not the first unusual step STIC has taken of late, having unveiled plans last week to go public via a reverse merger with its parent company. More details on these plans and more here.

They did the math

Regional returns
The latest research from eFront shows how different regions and strategies fared in their recovery from 2020’s pandemic dip. North America was the best-performing buyout market in the 12 months to Q1 2021, returning 43.3 percent, versus Europe’s 38 percent and Asia-Pacific’s 33.8 percent. It was also the strongest performer for venture capital, delivering 65.3 percent for the period, compared with 56.1 percent in Europe and 35.4 percent in APAC.

Essentials

Liverpool’s impact fund
Australian PE firm Liverpool Partners has held a first close on its debut multi-strategy impact fund, Australian Financial Review reports. The firm has so far collected A$350 million ($262 million; €225 million) for the vehicle, which will invest across PE, venture capital, unlisted infrastructure and renewables. Most of this capital was provided by domestic superannuation funds, though Liverpool aims to raise additional capital from family offices and high-net-worth investors ahead of a final close targeted at about A$400 million to A$450 million next year. It’s seeking a 20 percent internal rate of return.

Australia was home to A$29 billion of impact investing assets under management as of last year, a 46 percent rise from 2019, according to the Responsible Investment Benchmark Report Australia 2021. Bonds make up the bulk (88 percent) of these, followed by real assets at about 7.7 percent. Meanwhile, PE accounted for just 0.3 percent of impact AUM – a figure that should be improved by Liverpool’s new fund.

Dig deeper

LP meetings. It’s Monday, so here are some LP meetings to watch out for this week.

25 October

26 October

27 October

28 October

29 October

Today’s letter was prepared by Alex Lynn with Rod James and Carmela Mendoza.