Private equity bets on batteries; total entry value ticks up in August

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

Private equity is betting on the shift away from fossil fuels and boosting investment in battery technology.

Private equity and venture capital investments in battery energy storage systems this year totaled $17.86 billion globally through Aug. 20, according to S&P Global Market Intelligence data. The amount already surpassed the full-year 2023 total of $16.17 billion.

Driving the activity is a growing global electric vehicle market and the transition to renewables, Arun Mani, a principal with KPMG's US power and utilities strategy practice, told S&P Global Market Intelligence. Mani also cited the increasing energy demands of datacenters powering AI systems.

In the US, there is additional incentive for private equity to invest in battery manufacturing. The Inflation Reduction Act (IRA) expanded the tax incentives for clean energy projects, potentially enhancing their profitability. The IRA was predicted to draw more private capital to renewable energy projects when it was signed into law in 2022, and the uptick in battery investments could be taken as evidence that it is working.

Read more about private equity investments in energy storage systems.

CHART OF THE WEEK: Entry value expands slightly in August

⮞ Private equity and venture capital investments totaled $46.15 billion globally in August, an increase of 2.8% over the $44.90 billion in entries recorded during the same month in 2023, according to Market Intelligence data.

⮞ After an active April-to-June period that saw new private equity investments hit $184.94 billion globally, the highest quarterly total in about two years, the industry is on track to deliver an increase in annual entry value in 2024 after two consecutive down years.

⮞ Entry value through the first eight months of 2024 totaled $419.43 billion globally, a 24% increase from the same period in 2023.

TOP DEALS AND FUNDRAISING

– Sixth Street Partners LLC and Patron Capital Ltd. agreed to buy UK-based homebuilder Cala Group Ltd. from Legal & General Group PLC for £1.35 billion. The transaction is expected to close in the fourth quarter.

– Funds managed by Apollo Global Management Inc. agreed to buy a noncontrolling stake in a BP PLC subsidiary that holds a 20% stake in Trans Adriatic Pipeline AG for about $1 billion.

– Fortissimo Capital Management Ltd. agreed to sell an 80% stake in power conversion and networking solutions provider Enercon Technologies Ltd. to Bel Fuse Inc. for $320 million in upfront cash and up to $10 million in potential earnout payments.

– Insight Venture Management LLC is set to close its 13th fund with at least $10 billion in commitments in early 2025, London's Financial Times reported Sept. 15, citing five people with knowledge of the firm's plans.

– CFT Capital Management LLC raised about $781.2 million in capital commitments at the close of its second coinvestment fund. The fund, CFT Capital Partners Fund II LP, is anchored by the Cherng Family Trust.

– Phoenix Equity Partners Ltd. raised more than £600 million across two new funds. The firm secured more than £400 million for its latest flagship fund and £200 million for its growth partnership fund.

MIDDLE-MARKET HIGHLIGHTS

– Platinum Equity LLC and Butterfly Enterprises LLC agreed to buy baked goods supplier Rise Baking Co. LLC from Olympus Advisors LLC.

– Bow River Asset Management LLC and NVP Associates LLC sold their stakes in leave and accommodation management solutions provider Absence Soft LLC to Luminate Capital Management Inc.

– Forest Hill Partners LLC completed the sale of automation parts maker Micromatic LLC to Mitar Private Capital.

FOCUS ON: LIFE SCIENCES

– Contract development and manufacturing organization Serán Bioscience LLC raised more than $200 million in a strategic growth transaction led by Bain Capital Life Sciences Investors LLC.

– Genstar Capital LLC made a strategic majority investment in clinical trial organization Flourish Research.

– TVM Capital Healthcare Partners made an equity investment in healthy aging company Human Longevity Inc.

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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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