Looking for a glimpse of what’s to come in the private equity industry? Meet the 10 dealmakers named by Mergers & Acquisitions as the 2019 Rising Stars of Private Equity:
Austin Collier, Branford Castle Partners
Kevin Cunningham, LNC Partners (pictured)
Shawn Domanic, Sterling Partners
Stephen Jeschke, GTCR
Danielle Lalli, Huron Capital
Jason Mironov, TA Associates
James Oh, Transom Capital Group
Sophia Popova, Summit Partners
Pavan Tripathi, Bregal Sagemount
Christine Wang, Francisco Partners
The Rising Stars share a common set of core values. They are passionate about building companies. They are naturally curious and interested in changing things for the better. They enjoy working with portfolio company managers, investment bankers and other deal team members. They appreciate the responsibility and autonomy their firms have given them. They are grateful for the leaders who have helped shape their careers, and they are generous with their own time when it comes to nurturing the next generation. As the PE industry goes through a generational shift and many firm founders retire, it's well worth getting to know these emerging leaders. They represent the future of private equity.
For profiles and video interviews, see Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity
For Q&As, see 10 Rising Stars of Private Equity tell their tales
DEAL NEWS
Apax Digital, the growth equity arm of Apax Partners, has led a $177 million investment in Signavio. Existing investor Summit Partners is keeping a stake in the target. Signavio offers digital transformation services to mid and large-sized businesses.
Permira is buying a majority stake in fashion brand Reformation. Advisors to Reformation include: Goldman Sachs (NYSE: GS) and Latham & Watkins. Advisors to Permira include: Morgan Stanley and Skadden, Arps, Slate, Meagher & Flom.
Highlander Partners-backed Biamp Systems, a supplier of audio and video services, has acquired Audioprof from 3d Investors. The target makes speakers for large venues such as stadiums. Lincoln International advised Audioprof, and Regions Bank provided financing.
Core Industrial Partners-backed Prototek has acquired Cal-X, a provider of precision machining and sheet metal fabrication services. Winston & Strawn advised Core and Monroe Capital provided financing.
North Castle Partners has invested in Crunch Fitness franchisee CR Fitness. The target operates 20 locations across Florida and Atlanta. Advisors to CR Fitness include: Piper Jaffray & Co. (NYSE: PJC) and Katten Muchin Rosenman LLP. Advisors to North Castle include: Harris Williams and Morrison Cohen.
Hospitality and restaurant and software providers Fourth and Hotschedules have merged in a deal that is backed by Marlin Equity Partners and Insight Venture Partners.
Orion Advisor Services has purchased Advizr, a financial planning tech company, in a move to incorporate the technology into its turnkey asset management program and tech tools while helping clients take more of the reins in the planning process. Read the full story: Orion buys Advizr as competition for financial planning tech heats up.
NEW FIRMS, NEW FUNDS
The Carlyle Group LP (Nasdaq: CG) has raised two new funds. The firm raised $2.4 billion for its first Carlyle Credit Opportunities fund, which will directly invest in private capital for upper middle-market and large-sized businesses. In addition, Carlyle has raised $2.2 billion in a global infrastructure fund. The latter will invest in logistics, energy and infrastructure projects.
Vista Equity Partners has raised $850 million for its second Vista Equity Endeavor Fund, which backs data, software and technology-enabled businesses. "Companies are increasingly demanding an investment partner that can provide operational expertise and support in addition to capital investments," says Alan Kline, the co-head of Vista Endeavor.
Incline Equity Partners has raised a new fund called Incline Elevate Fund, at $314.5 million. Earlier in 2019, the fund made its first investment in Wholesale Supplies Plus, a distributor of raw materials, supplies and packaging used in the production of soap, lotion, cosmetics and candles. Sixpoint Partners served as placement agent.
To see which other firms are raising funds, see PE fundraising scorecard: Dominus, Flexpoint, Insight Partners, Sands.
Fruition Partners, a Denver-based private equity firm, has been formed by Jay Coughlon, Mac Hampden, and Jason Urband. The three were most recently with Lariat Partners. Fruition will focus on the consumer, distribution, industrials and manufacturing sectors.
TRENDS
Gender-diverse PE investment committees outperformed all-male investment committees substantially, finds a recent study by Oliver Gottschalg, a professor at HEC Paris. The results are compelling: Gender-diverse PE investment committees outperformed all-male investment committees substantially, as measured by several metrics: 7 percent more alpha; .52x more total value to paid-in multiple; and 12 percent higher internal rate of return. Also impressive: the failure rate of gender-diverse investment committees was 8 percent lower. The findings provide concrete evidence showing the value of including women on deal teams and may help to convince skeptics. Women still hold just 9.4 percent of senior positions at PE firms globally, the report found, indicating the industry still has a long way to go before reaping the benefits of gender diversity.
The low representation underscores the importance of projects that feature successful female dealmakers, such as Mergers & Acquisitions' Most Influential Women in Mid-Market M&A. Networking groups, such as Exponent Women, play a crucial role in developing communities for women dealmakers. The New York group is hosting its second annual Exponent Exchange on July 11 at Second in New York. The event last year brought together 200 women.
For more, see: Why private equity firms should include more women on deal teams
How to build gender diversity into deal teams
Most Influential Women in Mid-Market M&A
Venture-backed exit Activity hit a quarterly record $138.3 billion in the second quarter, according to the PitchBook-NVCA Venture Monitor, bringing total venture-backed exit activity through the first half of the year to $188.5 billion. A flurry of highly anticipated tech IPOs, including Bridgebio Pharma Inc. (Nasdaq: BBIO) and Adaptive Biotechnologies Corp. (Nasdaq: ADPT), drove exit value to already surpass every other annual exit total. For more, see Venture capital’s day at the beach: ADPT, BBIO, BYND, CRWD, PINS, WORK, ZM.
PEOPLE MOVES
Jessica Isokawa and Bradley Kondracki have joined law firm Morrison & Foerster as partners. Isokawa focuses on M&A and private equity, while Kondracki advises venture capital firms.
Kevin Slaughter was hired by law firm Levenfeld Pearlstein as a partner, where he focuses on M&A in the automotive, food, healthcare and manufacturing sectors.
FEATURED CONTENT
Alex Rodriguez is best known as the New York Yankees star who hit 696 home runs over the course of his 22-year baseball career, but today he’s making a name for himself as an investor as the founder and CEO of A-Rod Corp. One recent example: While serving as a guest judge on CNBC’s Shark Tank, Rodriguez backed Ice Shaker, an insulated bottle maker founded by former National Football League fullback Chris Gronkowski. Rodriguez talked about his life off the field as a savvy investor since his 20’s as the keynote speaker at EisnerAmper’s 4th annual Alternative Investment Summit at the The Museum of Modern Art on June 19. Among the topics discussed in a conversation led by Charles Weinstein, CEO of EisnerAmper: Rodriguez’ childhood as the son of a single mom; his investment thesis, which shares much with other middle-market investors; how he’s helping singer/dancer/actress Jennifer Lopez (to whom he became engaged in March) transition her business initiatives from licensing her brands to owning them; and how one day he just might buy a baseball team. Read the full story: A-Rod talks Ice Shaker, NRG eSports, J. Lo & maybe buying a baseball team.
Organizations in industries, ranging from manufacturing to healthcare, are using M&A to add automated technology in their processing systems. Advances in robotic technology are making it possible to complete more complex tasks at higher speeds and with improved control and outcomes. Read the full story: Accelerating automation through M&A.
Activity and urgency characterize the current dealmaking environment, say investment bankers and other M&A advisors interviewed by Mergers & Acquisitions. After a record-breaking 2018, forecasts for 2019 remain bullish. Advisors point to a lot of cash that must be deployed by strategic buyers and private equity firms alike; a healthy U.S. economy; and low interest rates. Competition for high-quality targets has never been more intense, especially for technology providers, they report, which means sellers are commanding high prices. It all adds up to a seller’s market. A mood of urgency prevails, as dealmakers seek to close deals quickly, while conditions remain favorable. The advisors interviewed for this story say they don’t see signs of a recession this year; however they are closely monitoring bellwethers, including corporate earnings, wage pressure, global supply chains and slowdowns abroad. They are recommending that clients be prepared for an economic slowdown in the next two years. Specialization is the name of the game, and investment bankers advise clients to seek targets with business-model stability, limited cyclical exposure and a recurring revenue business model. Technology, business services, healthcare, consumer and manufacturing are among the most promising sectors. Read the story: 8 M&A advisors urge closing deals now, while economy stays strong.
In today’s accelerated private equity environment, the urgency for the PE deal team to begin creating value and delivering results in line with the investment thesis begins on day one. That said, few fund sponsors have a defined process for identifying and addressing the leadership requirements that could undermine the value creation trajectory. Read the full article by Summit Leadership Partners' Dan Hawkins and Todd Fryling: Six steps to develop a post-close talent playbook.
The private equity industry has shifted focus from financial optimization to operational improvement, but with the latter already well-explored, where do we go from here? Firms that want to stand out must look to other areas of portco businesses to create value, and no aspect is riper for innovation than human capital. Read the full article by Alpine Investors' Graham Weaver: Focus on the human factor to drive value creation, urges Alpine.
Excelled. Innovated. Inspired. That’s what the eight winners of Mergers & Acquisitions’ 12th Annual M&A Mid-Market Awards did in 2018. Our awards honor the leading dealmakers and deals that set the standard for transactions in the middle market. In addition to Nike, award winners include: Fortive, TA Associates, the Riverside Co., Harris Williams, Monroe Capital, Goodwin and Luminate Capital Partners' Hollie Haynes. Read our full coverage: Meet the winners of the M&A Mid-Market Awards: Nike, Fortive, TA, Harris Williams.
Mergers & Acquisitions has named 36 leaders the 2019 Most Influential Women in Mid-Market M&A, including Kainos Capital's Sarah Bradley, Kayne Anderson Capital Advisors' Nishita Cummings and Pelham S2K Managers' Venita Fields. All 36 are outstanding dealmakers both inside and outside of their firms. This year, we asked the featured dealmakers to tell their own stories through Q&As, including their advice for women. Related: Meet the 2019 Most Influential Women in Mid-Market M&A.
EVENTS
Exponent Women hosts the Annual Exchange, which brings a trusted network of women dealmakers together for a focused day of robust content and networking, at Second in New York, on July 11. The Exchange provides attendees with opportunities to establish new connections, reinforce existing ones and absorb timely and relevant knowledge from industry leaders.
InIVest 2019 is being held from July 16-17 at the New York Marriott Marquis. The event brings together more than 1,500 executives from the wealth management industry.
The Women's Connection Golf Clinic & Networking event takes place on July 17 at the Granite Links Golf Club in Quincy, Massachussets. The event is being hosted by ACG Boston.
ACG Seattle hosts the Northwest Middle Market Growth Conference at the Fairmont Olympic Hotel in Seattle on July 25.
ACG New York's summer dealmaking conference takes place at Gurney's Star Island Resort & Marina in Montauk, NY, July 31-Aug.1.
The Great Lakes ACG Capital Connection is being held at the Westin Book Cadillac Detroit Hotel in Detroit from Sept. 4-6.
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