July reverses trend of declining PE entries; Blackstone leads on CEO pay

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

Bucking a trend that persisted through the entire first half of 2023, the value of private equity and venture capital entries globally posted a year-over-year increase in July.

Entries worldwide totaled $44.26 billion in July, up 10% from $40.20 billion a year earlier, although deal volume was still off significantly, falling 36% year over year.

The data sends a mixed message, but optimists might take it as a sign that a long-awaited turnaround for private equity is brewing after more than 18 months of depressed deal activity tied to the higher cost of financing, inflation and an uncertain outlook for the global economy.

Those green shoots are emerging in a very different economic environment to the one that existed before 2022. On his firm's second-quarter earnings call, Apollo Global Management Inc. CEO Mark Rowan declared 2023 the "end of an era" for private equity as the tailwinds that fueled dramatic growth, including near-zero interest rates and pandemic-era government stimulus, fade.

"People will have to go back to investing in the old-fashioned way. They'll actually have to be very good investors," Rowan said.

Read more about private equity and venture capital entries worldwide in July.

CHART OF THE WEEK: Massive payday for Blackstone's Schwarzman

⮞ The highest paid CEO leading a listed US-based private equity or venture capital firm is Stephen Schwarzman, co-founder of Blackstone Inc., according to an S&P Global Market Intelligence analysis.

⮞ Schwarzman was paid $253.1 million in total adjusted compensation in 2022, up nearly 58% year over year from his 2021 earnings and more than 1,000 times the median Blackstone employee's salary.

⮞ Blackstone became the first alternative asset manager with $1 trillion in assets under management earlier in 2023.

TOP DEALS AND FUNDRAISING

– Clayton Dubilier & Rice LLC struck a deal to buy packaging company Veritiv Corp. for $170 per share in cash. The transaction is expected to close during the fourth quarter.

– KKR & Co. Inc. will acquire book publisher Simon & Schuster Inc. from Paramount Global in an all-cash deal valued at $1.62 billion.

– Revelstoke Capital Partners LLC raised $1.7 billion for Revelstoke Capital Partners Fund III LP and affiliated investment vehicles. The fund invests in the healthcare services sector.

– HealthEdge Investment Partners LLC secured more than $160 million at the final close of its fourth fund. Healthedge Investment Fund IV LP will invest in healthcare companies.

MIDDLE-MARKET HIGHLIGHTS

– Kohlberg & Co. LLC signed a deal to purchase a majority interest in Worldwide Clinical Trials Holdings Inc., a contract biotechnology and pharmaceutical research organization, through an affiliate. Seller The Jordan Co. LP will continue to own a meaningful minority stake in the business.

– Partner One Capital completed the acquisition of Fidelis Cybersecurity Inc., a provider of cyber defense solutions to global enterprises.

– Five Elms Capital Management LLC exited its investment in Tagger Media Inc. by selling the influencer marketing and social intelligence platform to Sprout Social Inc.

– Middle-market investor Novacap TMT acquired Cadent LLC, a converged television advertising solutions provider, in a deal with seller Lee Equity Partners LLC.

FOCUS ON: INDUSTRIAL

– The Carlyle Group Inc. agreed to buy a significant minority stake in engineering services firm QuEST Global Services Pte. Ltd. Current QuEST backers Bain Capital LP and Advent International Corp. will exit their stakes in the Singapore-based company.

– A fund advised by Deutsche Beteiligungs AG is buying a majority stake in Tbd Technische Bau Dienstleistungen Gmbh & Co. Kg through a management buyout. The founders of the German infrastructure services company will retain a minority interest, and the deal is slated to close later in August.

– Tidal Vision Products Inc. acquired water treatment systems company Clear Water Services LLC from Graham Capital Group LLC.

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.