Side Letter: PEI Awards 2019 shortlists, hot co-investments, BlackFin, Arroyo, DBAG

It's time to vote in the PEI 2019 Awards; co-investments continue to be hot; and fundraise news on BlackFin, Arroyo and DBAG. Here’s today's brief, for our valued subscribers only.

Just happened

An illustration of a ballot boxGet out the vote!

Voting is now open for the 2019 Private Equity International Awards! Every year since 2001 we’ve given you – the industry – the opportunity to determine the outcome of private equity’s most extensive set of global awards. We have a whopping 76 categories this year split across five sections. See who made the shortlist and cast your vote here. The polls close on 10 January and the winners will be revealed in March.

How investors view co-investments

More insight from the LP Perspectives Survey 2020: 59 percent of investors plan to participate in co-investment opportunities in private equity during the next 12 months. Unsurprising, as many LPs – at least anecdotally – are reporting that their co-investments are outperforming. We also spoke with three leading investors who gave their thoughts on what to expect in 2020. “LPs have seen better days,” said Raphaëlle Koetschet from France’s Caisse des Dépôts, referring to lightning quick fundraises and metrics that require “more and more” scrutiny.

Sector appeal

European financial services specialist BlackFin Capital Partners has hauled in €985 million for its third buyout fund – more than double its predecessor, which closed on €410 million in 2016. The successful fundraise is further evidence of increased LP appetite for sector-focused and specialist funds, which are particularly appealing in the late cycle. Investments by sector-specialist private equity funds outperform those made by generalist private equity funds by 4.7 percent, according to Cambridge Associates research.

Essentials

Allen and the AG: what you need to know. Last week, the Office of the New York State Attorney General filed a lawsuit alleging that Laurence Allen, the chief executive of broker-dealer NYPPEX, has been engaged in a fraud dating back to 2008. NYPPEX matches secondaries buyers and sellers. Sister publication Private Funds CFO breaks down all you need to know about the case, from the key points of the prosecutors’ claims in the 51-page lawsuit to the preliminary defence strategy Allen’s lawyer will pursue as the AG looks to freeze the relevant funds’ assets and appoint a receiver.

Energy fundraise scoop. Houston, Texas-based energy investor Arroyo Energy has held a first close for Fund III with commitments of circa $420 million, according to market sources. The former Bear Stearns and JPMorgan unit is targeting $750 million and First Point Equity is raising it, according to a filing. First Point and Arroyo declined to comment.

DBAG Fund VIII nears the finish. German manager Deutsche Beteiligungs AG (DBAG) is nearing the €1.1 billion target for its eighth flagship offering, its largest-ever fund focused on the DACH region. The firm has thus far collected more than €1 billion of commitments and expects a final close in early 2020, per a firm statement. About a quarter of the fund will come from DBAG’s balance sheet.

Inside tip

Have news or views you’d like to share with us, on this or else? We’d love to hear from you.

Dig deeper

PennSERS’ split commitment. Pennsylvania State Employees’ Retirement System has agreed to commit $150 million, split evenly between Insight Venture Partners XI and Clearlake Capital Partners VI. Here’s a breakdown of the $29.5 billion US public pension’s total investment portfolio.

For more information on PennSERS, as well as more than 5,900 other institutions, check out the PEI database.

Chart showing PennSERS's asset allocationHe said it

“That’s a scam. There’s no way to defend that. It’s immoral, and Trump promised to get rid of it. Well, why hasn’t he? Well, he hasn’t because Republicans aren’t eager to do it.”

Conservative commentator Tucker Carlson attacks the tax ‘loophole’ enabling carried interest to be taxed as capital gains.


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Today’s letter was prepared by Toby MitchenallIsobel MarkhamCarmela MendozaAlex LynnPreeti Singh and Graham Bippart


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