S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.
Private equity fundraising efforts targeting mainland China show results running counter to global fundraising, which appears to be on track for a turnaround in 2025 after three consecutive annual declines.
Mainland China-focused private equity and venture capital funds raised $350 million between Jan. 1 and June 30, according to Preqin Pro, or 1.4% of the $24.88 billion fundraising total for full year 2024.
An ongoing trade dispute between China and the US and slowing domestic growth in China have private equity investors looking elsewhere in Asia-Pacific for deals. Attention has shifted to neighboring countries such as Japan, where underperforming public companies and a large-scale business succession crisis are value-creation opportunities for private equity.
"There's easier money and more money to be made right now outside of China than there is by trying to find the right investments in China," Gavin Geminder, global private equity sector leader for KPMG, told S&P Global Market Intelligence.
Read more about mainland China-focused private equity fundraising and investment activity.
CHART OF THE WEEK: Middle East sovereign wealth funds boost coinvestment activity
⮞ Joint investments by Middle East-based sovereign wealth funds and private equity funds totaled $39.36 billion this year through July 15 and were on track to exceed the $45.12 billion prior-year total, according to Market Intelligence data.
⮞ Among the deals announced so far this year, the largest is a $23.86 billion takeover bid for oil and natural gas producer Santos Ltd. by Abu Dhabi Developmental Holding Co. PJSC, The Carlyle Group Inc. and XRG PJSC.
⮞ Middle Eastern sovereign wealth funds are turning from customers into partners of private equity firms, according to a report issued in March by Mitsui & Co. Ltd.
TOP DEALS
– EQT AB (publ)-managed EQT X and Canada Pension Plan Investment Board (CPP Investments) agreed to acquire Governmentjobs.com Inc., doing business as Neogov, from Warburg Pincus LLC and The Carlyle Group Inc. in a transaction expected to be completed in the coming months. Reuters pegged the transaction value at over US$3 billion, including debt. Moelis & Co. LLC was the financial adviser, and Willkie Farr & Gallagher was legal counsel to Neogov. Jefferies LLC was the financial adviser, and Ropes & Gray was legal counsel to EQT and CPP Investments.
– Funds managed by Permira Advisers Ltd.'s German arm and Nordic Capital Epsilon SCA SICAV-RAIF proposed to acquire Danish vaccine manufacturer Bavarian Nordic A/S for 18.1 billion kroner, offering 233 kroner per share, a 21% premium over the recent closing price. The deal aims for completion in the fourth quarter, with plans to delist Bavarian Nordic from Nasdaq Copenhagen. Nordea Danmark and Citigroup Inc. were financial advisers, while Kromann Reumert was legal adviser for Bavarian Nordic.
– One Equity Partners, Warburg Pincus and Green Cement Investments agreed to sell cement alternatives supplier Eco Material Technologies Inc. to Ireland-based building materials supplier CRH PLC for $2.1 billion. The transaction is expected to close later in 2025. Jefferies was financial adviser, and Latham & Watkins LLP was legal adviser to Eco Material.
– GTCR LLC agreed to acquire FMG Suite LLC, a US provider of marketing automation software, from Aurora Capital Partners. The transaction is expected to close in the third quarter. Lincoln International LLC and William Blair were financial advisers, and Gibson Dunn & Crutcher LLP was legal counsel to FMG. Ardea Partners LP, Baird and Harris Williams were financial advisers, and Simpson Thacher & Bartlett LLP was legal counsel to GTCR.
TOP FUNDRAISING
– Boston-based Silversmith Capital Partners held the first and final close for Silversmith Capital Partners IV LP, reaching its $1.25 billion hard cap. The fund was oversubscribed and is the firm's largest to date. It will target founder-led technology and healthcare companies. Kirkland & Ellis was fund formation counsel.
– 50 South Capital Advisors LLC, the alternatives investment arm of Northern Trust Asset Management, closed two oversubscribed flagship private equity funds, raising a combined total of over $2 billion. Secondaries fund Private Equity Strategic Opportunities Fund V LP secured $1.2 billion, while Private Equity Core Fund XI LP, focused on global small and middle-market buyouts and early-stage venture capital, closed at $893 million.
– India's National Investment and Infrastructure Fund Ltd., backed by the Indian government, is preparing to launch a $1 billion successor private equity fund, NIIF Private Markets Fund II, targeting a first close above the $600 million its predecessor raised in 2019. The new vehicle will allocate 25% to coinvestments with its general partners and have an expanded focus on growth and venture investments across sectors such as manufacturing, technology and electric mobility.
– Architect Equity Management LLC closed its inaugural institutional vehicle, Architect Equity Fund I LP and Architect Equity Fund I-A LP, at $285 million, surpassing its $200 million target. The fund targets lower-middle-market businesses across North America, focusing on diversified industrials, business services and consumer staples, particularly those facing operational or financial challenges. Connaught (US) LLC was placement agent, and Kirkland & Ellis LLP provided legal counsel.
– Los Angeles-based private equity firm Skyline Investors LLC closed its first fund, Skyline Investors Fund I, on its $125 million target. The firm focuses on impact-driven investments in underserved micromarket businesses across sectors such as healthcare, consumer and business services, technology, and domestic manufacturing.
MIDDLE-MARKET HIGHLIGHTS
– Brightstar Capital Partners LP will acquire a 50% stake in Arden University Ltd., a UK-based provider of flexible higher education, from Global University Systems BV. The transaction aims to enhance Arden's international reach and digital innovation. A cash consideration will be paid by Brightstar, and an undisclosed value will be paid for the common equity of Arden University. Brightstar partner and co-chair Marcelo Claure would serve as board chair upon completion of the deal.
– Lower-middle-market firm CenterGate Capital LP provided a round of funding as a new investor in Canada-based robotic inventory management technology company JRTech Solutions Inc. Akerman LLP was CenterGate's legal adviser, and Cafa Corporate Finance was JRTech's financial adviser.
– German private equity firm Hypax GmbH, which focuses on corporate carve-out deals, was set to acquire the Bus & Rail (Mobility) business of Schweiter Technologies AG in a carve-out transaction scheduled to close by July 31.
FOCUS ON: JAPAN'S $1B-PLUS PRIVATE EQUITY DEALS
EQT AB (publ)'s proposal this week to acquire an additional 91.63% stake in Japan-based elevator manufacturer Fujitec Co. Ltd. for over ¥400 billion, or $2.7 billion, marks the fifth private equity deal in Japan that exceeded $1 billion in the year to July 31.
For full year 2024, Japan had only four private equity deals exceeding $1 billion, according to Market Intelligence data.
The larger deals are indicative of Japan's appeal. Private equity sees opportunity to boost low profit margins of Japanese companies, to expand operations internationally and leverage cheap financing due to uniquely low interest rates. Additionally, a succession crisis in family-owned businesses and the growing acceptance of private equity partnerships are creating more investment prospects.
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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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