Side Letter: Cinven’s €10bn, Carlyle revenue drop, fretful Future 40

Some Future 40 leaders are fretful. Cinven and Carlyle are not. A long weekend in the UK means Side Letter will be back Tuesday. For now, here’s today's brief, for our valued subscribers only.

Just happened

Future shocks

Diversity, political uncertainty, recruiting and technological change – just some of the biggest challenges facing private equity, according to a panel of our Future 40 leaders. They’re optimistic about PE’s future, but are not without concerns:

“The advent of co-investing and direct investing has really changed things. We have so much more nuanced and deep relationships with our GPs now that we pursue deals alongside them.”
Marcus Frampton, CIO, Alaska Permanent Fund

“I am often concerned about the impact of private equity on society as a whole. Is our capital going to create value that goes beyond financial gains?”
Sandro Diazzi, Praesidium

“Large capital flows to come into private markets, lack of memory (even though most of us have been through at least a cycle), digital disruption if not dealt with, managing generational changes and strong egos [are the biggest challenges].”
Raphaëlle Koetschet, Caisse Des Dépôts

Cinven’s €10bn haul

The award for second-biggest fundraise so far this year goes to: Cinven. The European buyout giant took less than four months to hit the hard-cap on its seventh fund, beating EQT’s €9 billion infra haul and behind Thoma Bravo’s $12.6 billion in the first quarter.

Ardian lays anchor in infra

Ardian has backed a curious secondaries deal involving a subsidiary of the world’s largest insurer, sister title Infrastructure Investor reports. Ping An Insurance Overseas pulled together existing commitments to several infrastructure funds and used them as seed assets for a $758 million fund of funds. Ardian underwrote the deal, becoming the anchor investor in the fund. It’s now syndicating it out to other LPs that want a piece.

Earnings watch: Carlyle

Carlyle is set to achieve its four-year goal of reaching $100 billion in fundraising well ahead of schedule, but its net performance revenues fell by 54 percent to $226 million for the 12-month period ended 31 March. The firm is not unduly concerned: co-chief exec Kewsong Lee called it a “short-term trough”, driven largely by young investments in the funds across all asset classes. Meanwhile management fees in private equity increased by 67 percent quarter over quarter to $190 million in Q1, driven largely by fee activation for US, Europe and Asia buyout funds over the past year.


Goldman report. More than one-third of insurers expect to increase their allocation to private equity over the next 12 months as low interest rates in Europe and Asia-Pacific drive yields lower, per Goldman Sachs Asset Management’s latest insurance survey. The results mark a 32 percent net rise from last year. Asian insurers are most bullish on private equity, with 56 percent planning to increase their allocations, compared with 30 percent of US companies and 21 percent in EMEA.

Coming to America. Around half of the €31.3 billion EMEA-based GPs invested from January to 15 March was in North American companies, triple the aggregate deal value for the region in the same period last year, data from S&P show. Seeking investment opportunities in the US is no surprise thanks to the size of the market, an investor source tell us, and major European managers including HgEQT and Eurazeo have expanded their geographic footprint to the US in recent years.

Dig deeper

Want more data? There are more than 6,700 institutions in our database, including CinvenPing AnCarlyle and Goldman Sachs from today’s Side Letter.

He said it

“It’s very stupid. There are already almost no investments. Why reduce them to zero?”

A senior Russian businessman explains to the FT (paywall) how the arrest of Baring Vostok’s Mike Calvey has affected foreign investment sentiment in the country.

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