Getting to know PE fund managers; PE's growing share of satellite deals

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

Even today, with more private equity data available at the click of a button than ever before, good old-fashioned relationship-building with fund managers is critical for institutional investors planning their next round of commitments.

That was one of the key messages Greg Turk, chief investment officer of family office NG4 Capital, shared on a recent episode of an S&P Global Market Intelligence podcast series.

Turk, who previously spent close to 20 years with the Teachers' Retirement System of the State of Illinois, where he was the public pension fund's director of investments, said one of the biggest shifts in his private markets career is the emphasis he and his team now put on getting to know private equity fund partners.

"Compared to 15, 20 years ago, my team and I spend more time getting to know the partners, really understanding what their core competencies are," Turk said.

That is especially true of the partners tasked with making operational improvements — and, hopefully, creating value — at portfolio companies, he added. Is that partner going to be around for the entire life of the fund? What about the next generation of partners rising through the ranks? Do they inspire the same level of confidence?

Turk's view is echoed in Market Intelligence's annual Private Equity and Venture Capital Outlook, published this week. Global limited partners were asked to list the key challenges they face when investing in private equity funds, and the top response was "assessing fund manager expertise and capability," selected by 59% of respondents.

Listen to the interview with Greg Turk on the latest episode of "Private Markets 360°."

CHART OF THE WEEK: Private equity's growing share of satellite deals

⮞ Private equity and venture capital firms backed 49.1% of all M&A deals and funding rounds targeting the satellite industry in 2023, their highest share since at least 2019, according to Market Intelligence data.

⮞ Venture capital firms, in particular, have played a key role in helping businesses based on constellations of small satellites clear an early and expensive hurdle: launching those satellites into low earth orbit.

⮞ Traditional private equity investors are expected to expand their role in the satellite industry as it matures and industry trends, including the industrialization of satellite manufacturing and steady demand for satellite data from government and commercial clients, lower the risk profile of investments.

TOP DEALS AND FUNDRAISING

– Thoma Bravo LP agreed to buy Darktrace PLC in an all-cash deal that values the UK-based cybersecurity AI company at about $4.99 billion.

– Apollo Global Management Inc. agreed to buy US Silica Holdings Inc. in an all-cash deal that values the industrial minerals company at about $1.85 billion. Apollo will buy the company for $15.50 per share, an 18.7% premium to US Silica's closing stock price on April 25.

– General Catalyst Group Management LLC is close to raising almost $6 billion for a tech-focused fund, London's Financial Times reported April 28, citing multiple people with knowledge of the matter. The vehicle could be closed as early as June, according to the report.

MIDDLE MARKET HIGHLIGHTS

– H.I.G. Capital LLC completed the acquisition of industrial cleaning and infrastructure maintenance services provider USA DeBusk LLC.

– Inflexion Private Equity Partners LLP closed the sale of automotive retailing solutions company Automotive Transformation Group to Keyloop Holdings (UK) Ltd.

– Riverspan Partners, through its debut fund, invested in talc mining and processing company Barretts Minerals Inc.

– Norwest Equity Partners acquired interior wall coverings and design solutions company MDC Interior Solutions LLC.

FOCUS ON: BIOTECHNOLOGY

– Enlaza Therapeutics Inc. raised $100 million in a series A funding round. Investors including Frazier Life Sciences Management LP and Avalon Ventures LLC participated in the round.

– Molecular diagnostics company Variantyx Inc. secured $36 million in a funding round. The round was joined by New Era Capital Partners and Peregrine Ventures, among other investors.

– UK-based Locate Bio Ltd. obtained £9.2 million in a funding round from Mercia Ventures Ltd. and BGF Investment Management Ltd.

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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.

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