Category Archives: WEEKLY SPIN

Volatility gets all the credit

Private credit markets are facing the spectre of recession, with the combined effects of rate hikes, inflation and volatility providing more stopping power than ceramic brakes on a Ferrari.If, as a recent Leveraged Finance Survey suggests, the US enters recession over the next 12 months, credit availability could start to contract and make it harder to get deals over the finish line. Buyside firms will be hoping that there aren’t too many potholes ahead but for the short-term, credit markets look set to be on a collision course with a streetcar named Recession.

inspired by PitchBook

PE Tips

Acquiring tea producers and huge plantations are not going to be everyone’s cup of tea within private equity, despite CVC Capital’s $5 billion deal with Unilever last year. With investors more ready than ever to ask tough questions around work conditions and corporate ethics, PE firms will be expected to read the leaves to avoid potential stewardship challenges. Tea companies are fertile investment territory but PE firms will have to hope things remain sweet, not bitter…

inspired by The Financial Times

Low latency, High demand…

Private equity groups have a surging interest in datacentres, funding more than 90% of M&A deals through the first half of the year. New data published by Synergy Research Group shows that GPs are clambering over the racks of servers and routers to get deals done and plug in to future global data demand. They may only house soulless rows of computer networks but these facilities are proving to be quite the centre of attention…it’s enough to make the machines blush.

inspired by ComputerWeekly

‘Switch’ing attitudes – Is Japan ready to play with PE again?

The spiritual home of arcade games might be about to see the launch of a new blockbuster if Toshiba approves a $22 billion buyout deal. Japan has long been suspicious of private equity but as it softens its view, some of the industry’s biggest names will be hoping to earn the highest score and secure their champion credentials. It may only be Round 1 but expect to see plenty of action over the coming months as the deal takes shape and players get eliminated.

inspired by AXIOS

Natural catastro-fee

Private equity groups are entering a new period that could well find them having to rethink their hurdle rates. With government bonds yielding 4.5% and private equity returns likely to recalibrate to a lower level in today’s challenging markets, General Partners cannot risk pulling a hamstring by setting the performance bar too low. Many will increasingly find investors exercising their negotiating skills to raise the hurdle rate and lower fees. In this competitive arena, who will have the flexibility, and the confidence, to meet the hurdle rate challenge?

inspired by CIO