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Side Letter: Horizon’s Ukraine learnings; Apollo’s €1bn life sciences buy; Onex fundraising warning

Horizon Capital's Lenna Koszarny discusses the Ukrainian firm's efforts to safeguard staff and portco employees in the wake of Russia's invasion. Plus: Apollo has become the latest firm to snap up a life sciences unit and Onex warns fundraising could take longer than usual. Here's today's brief, for our valued subscribers only.

Just happened

Horizon Capital’s Lenna Koszarny: working harder and faster (Source: Ivey Business School)

Lessons from Ukraine
Side Letter last week tuned into a virtual panel session exploring leadership lessons from the crisis in Ukraine, hosted by Canada’s Ivey Business School. Among the guests was Lenna Koszarny, founding partner and chief executive of Ukraine’s largest private equity firm, Horizon Capital. Koszarny, who was at an investor meeting in Washington DC when Russia invaded, says she made it her mission to ensure the safety of more than 30 Horizon staff and 26,591 portfolio company employees from her hotel room “command centre”.

“Nothing in the world of finance prepares you for something like this,” she noted. “Everyone has business continuity plans and we had those. And we also made sure we had a full plan and rooms booked in Western Ukraine for all of our people.” In total, Koszarny and her team were able to move 150 women and children out of the country within 24-48 hours of the invasion.

Koszarny’s insights are a sobering reminder that, while many PE executives globally are struggling to get a handle on the financial implications of war in Ukraine, for some of their peers the invasion remains a very human crisis.

“When I understood the breadth of what’s happening in Ukraine, it meant that I needed to work faster, harder,” she said. “There is no time to be heartbroken; there is no time to be crying. When people’s lives are on the line, you have to move and you have to make judgment calls. You have to rely on your inner strength and resilience.”

A sector in rude health
What do Apollo Global ManagementCarlyle Group and EQT have in common? Besides being giants of alternatives, they each share an appetite for life sciences. Apollo has become the latest to enter this space through inorganic growth, unveiling on Monday plans to acquire a minority stake in France’s Sofinnova Partners. The €1 billion investment will help fund existing Sofinnova strategies, as well as future strategies the duo may co-develop. With over €2.5 billion of AUM, Sofinnova is the largest independent European venture capital firm in life sciences, per a statement. It most recently collected €472 million for its 10th flagship.

Apollo’s purchase echoes EQT’s acquisition of Europe’s Life Sciences Partners last year and Carlyle’s acquisition of transatlantic firm Abingworth last month. Such acquisitions, which tend to involve venture capital firms, provide PE behemoths with access to a sector and market segment that – either due to scale or the requisite sector knowledge – might otherwise escape their grasp. “There are a whole lot of very interesting, fast-growing companies in between that are already beyond the stage of where EQT invests in,” Michael Bauer, co-head of EQT’s global healthcare sector team, told PEI in November. “And they’re a little bit at the too-early stage for us to invest in from the buyout fund.”

Onex-pected delays?
Onex is the latest manager to admit that fundraising efforts could be delayed by the congested environment, our colleagues at Buyouts report (registration required). The firm anticipates a first close on its next flagship buyout offering, Onex Partners VI, in late Q2 or early Q3, president Bobby Le Blanc said on its latest earnings call. ONCAP V, its latest mid-market vehicle, is expected to launch in autumn.

“I expect it to be a longer process,” Le Blanc said on the call. “I expect it to be more difficult than prior fundraises. But I expect we will be able to maintain many of our current partners and other new partners, including distributing [Onex Partners VI] through [wealth manager] Gluskin and potentially other retail channels, which we’re actively exploring.

Essentials

From BC to HIG
Stephan Madsen, a former managing director at BC Partners, has joined HIG Capital’s European mid-market leveraged buyout team, per a statement. Madsen, who will serve as a Nordic-focused MD, joined BC Partners in London in 2017 from IK Investment Partners, where he spent seven years. His appointment is timely; HIG raised €2 billion last year for its debut European mid-market fund, which targets Western Europe companies valued at up to €1 billion.

Silverhorn’s PE hire
Bert Kwan, a former managing partner at BDA Capital Partners (the Southeast Asia investment arm of investment banking advisory BDA Partners), has been appointed head of PE at Hong Kong-based multi-asset firm Silverhorn. Side Letter caught up with Kwan to learn more about the firm and his new role. A few things to know:

  • Silverhorn manages approximately $2 billion across a number of strategies, including multi-asset hedge funds, private debt, and PE.
  • In this newly created role, Kwan is tasked with launching Asian VC and growth equity fund of funds, as well as investing client capital into co-investments and directs.
  • Silverhorn’s investor base comes from Europe and Asia.
  • Kwan was previously a managing director at Southeast Asia PE firm Northstar and head of ASEAN at Standard Chartered PE.

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