Private equity dry powder sets record; investment in Asia-Pacific falls

S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.

Private equity dealmaking is down, while dry powder is up. Way up.

Global private equity dry powder levels rose more than 11% in just six months to a record $2.49 trillion as of July 3, according to S&P Global Market Intelligence and Preqin data. That cache of uncommitted capital is growing at least in part because private equity firms are not finding ready opportunities to put it to work.

The value of private equity entries in the second quarter was down 53.5% from a year earlier. That followed a first quarter in which the value of private equity entries was off 48.6% from its prior-year total.

One thing to watch for as the large, publicly traded asset managers report second-quarter earnings in the coming weeks will be clues to when private equity fund managers see a potential uptick in entries.

Blackstone Inc. led off earnings season with its July 20 conference call, and the firm reported deployment of nearly $7.8 billion into its corporate private equity strategy. That compares to deployment of just $407 million in the first quarter, and it is the largest quarterly deployment figure reported by Blackstone since the fourth quarter of 2021 — hinting that a turnaround may be underway.

Read more about the record level of private equity dry powder, including the 25 global firms with the most uncommitted capital for their private equity strategies.

CHART OF THE WEEK: Fading Asia-Pacific investment

⮞ Private equity and venture capital investment in Asia-Pacific, excluding Japan, fell 34.5% year over year to $6.01 billion in the second quarter.

⮞ The first-half totals show an even steeper year-over-year drop. Transaction value was down 40.3% to $14.37 billion in the first six months of 2023 from $24.06 billion over the same period a year ago.

⮞ The largest private equity-backed Asia-Pacific deal announced in the first half was Bain Capital LP's $2.26 billion bid to take hyperscale datacenter solutions company Chindata Group Holdings Ltd. private.

TOP DEALS AND FUNDRAISING

– Ares Management Corp. signed a deal to acquire a full stake in Crescent Point Group, an Asia-focused private equity firm with headquarters in Singapore. Ares expects to close the acquisition in the third quarter and will issue class A common stock as primary consideration for the deal.

– Funds managed by affiliates of Apollo Global Management Inc. sold about 4.4 MW of operating solar assets in South California to clean electrification company Altus Power Inc.

– CVC Capital Partners Ltd. closed its CVC Capital Partners IX fund with €26 billion in capital commitments, surpassing its target of €25 billion.

– Fremman Ltd. closed its first fund, Fremman I MM, with more than €600 million in commitments.

MIDDLE-MARKET HIGHLIGHTS

– Funds managed by Stone Point Capital LLC partnered with their majority-owned portfolio company, Allied Benefit Systems LLC, to acquire digital health benefits integration and payments platform Medxoom Inc.

– Searchlight Capital Partners LP will acquire UK-based specialist native asset manager Gresham House PLC in an all-cash deal worth £440.6 million on an enterprise value basis.

– TPG Capital LP agreed to purchase healthcare technology company Nextech Systems LLC from Thomas H. Lee Partners LP for $1.40 billion. TPG expects to close the transaction in the third quarter.

– Bow River Capital Partners acquired Vitruvi Software, which provides utility construction software solutions.

FOCUS ON: BIOTECHNOLOGY

– An investor group including Medicxi Ventures (UK) LLP agreed to divest Versanis Bio Inc., a clinical-stage biopharmaceutical company, to Eli Lilly and Co. for nearly $1.93 billion.

– ArchiMed SAS and Warburg Pincus LLC completed the sale of French biotechnology company Polyplus-transfection SA to Sartorius AG unit Sartorius Stedim Biotech SA.

– An investor group including Tech Coast Angels Inc., RA Capital Management LP, ExSight Ventures, Friedman BioVenture Fund, Viva BioInnovator and Access Biotechnology sold San Diego-based biotechnology company DTx Pharma Inc. to Novartis AG for $1 billion.

For further private equity deals, read our latest In Play report, which looks at potential private equity-backed M&A, including rumored transactions, each week.