EQT on why PE shouldn’t be left out
PE-backed companies should be able to tap government aid packages in the covid-19 crisis, said EQT chief executive Christian Sinding (pictured) on the firm’s Q1 earnings call Friday. PE firms, banks and governments are “all in this challenge together”, he added. The Nordic giant estimates about 15 percent of its companies in key funds will require additional equity and it needs around 5 percent of committed capital in the funds to support affected companies.
Blackstone fundraising defies covid-19
Blackstone managed to raise $27 billion in the first quarter, despite its corporate private equity portfolio taking a beating in the first quarter – down 21.6 percent due to the impacts of covid-19 and severe dislocation in the energy markets. This includes almost $5 billion for its latest core PE fund, all raised in the last two weeks of March. Co-founder and chairman Steve Schwarzman told listeners on Thursday’s Q1 earnings call that, thanks to the firm’s long track record and strong market relationships, the switch to fundraising over video has been pretty smooth: “That bond of trust that you have that’s developed over decades really becomes exceptionally useful in a situation like this.”
Aussies rush to redeem
About half a million Australians have taken advantage of the government’s virus relief measures and dipped into their superfunds to the tune of about A$4.4 billion ($2.7 billion; €2.6 billion), as at the end of last week. Some funds with membership concentrations in hard-hit industries such as hospitality will be disproportionately affected, but experts tell sister title Infrastructure Investor that overall liquidity is not a short-term concern. According to a report by the Australian Financial Review (paywall) the A$53 billion industry fund Hostplus is seeking to withdraw A$1.5 billion from an unlisted property vehicle. There’s speculation that infrastructure fund mandates might also be on the table to help cash-strapped funds.
Have you heard of any concerns from Australian superfunds over the withdrawal scheme or liquidity in general? Let us know.
He said it
“If you think about who are the investors in EQT’s funds, they are pension funds and insurance companies from around the world. The owners of the companies we are taking about in PE is not EQT, it’s actually our investors who own these companies. We are managing the companies on their behalf.”
Tough exit for VCs in Europe. European VCs saw the lowest exit activity since 2012 in Q1, writes Rebecca Szkutak of sister title Venture Capital Journal. The quarter closed out with €727 million of capital across 99 transactions with the exit of Irish semiconductor company, DecaWave, taking more than half the pot (€369.5 million). It doesn’t look likely the market will reach the €15.4 billion mark that 2019 recorded. text.
What you’re reading
What were the three most eagerly consumed pieces of content across our titles last week?
1. Fundraising scoops prove they’re never old hat. Adam Le’s exclusive on Intriva Capital, a distressed debt and special sits-focused firm founded by two former Apollo Global Management execs, who’ve made headway on their sophomore fund, was the most-read on PEI. Little wonder strategies such as these are garnering attention at a time when companies are in dire need of capital.
2. Isobel Markham’s report on the almost 22 percent drop in Blackstone’s PE portfolio value in Q1 came next, as we’ve outlined above.
3. In third place: this piece from sister title Buyouts’s Chris Witkowsky, who tuned into Pennsylvania State Employees’ Retirement System’s investment committee meeting on Tuesday to hear state treasurer Joe Torsella question CVC Capital Partners’ touting of its ability to invest in opportunities created by the pandemic-fuelled economic downturn (SERS did pledge €50 million to CVC’s latest fund).
Have news or views you’d like to share with us, on this or else? We’d love to hear from you.
LP meetings. It’s Monday, so here are some LP meetings to watch out for this week.
- 28 April – New Mexico State Investment Council is holding an investment council meeting; City of Fresno Retirement Systems is holding a board meeting; Los Angeles City Employees’ Retirement System has a board and investment committee meeting; Vermont State Retirement System is holding an investment committee meeting
- 29 April – Public Employees’ Retirement System of Mississippi is holding a board meeting; St Louis Police Retirement System is holding a board meeting
- 30 April – New York State Teachers’ Retirement System is holding a board meeting
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