Innovative Ardian-led Manulife secondary keeps assets, team in-house; Impact Engine targets $100 mln for debut PE fund; AEA jumps back into healthcare with Numotion deal
Congratulations, Hubsters. You’ve made it to mid-week.
This morning, we have a report from StepStone Group that looks at the relationship between fund duration and illiquidity. StepStone found a negative correlation between duration and fund IRRs. According to “Cracking the Illiquidity Code: Long-term Partnerships, Short Term Cash Flows,” a fund’s performance fell by 3.4 percent for each additional year of duration. Now Hubsters, I’m neither a PE executive nor a mathematician. I took this to mean that the longer a GP holds an investment, the worse it is for the IRR.
StepStone also found that top-quartile managers tend to have shorter duration funds. But it also discovered that many of the worst performing funds also had short durations.
What’s your experience with this calculation, Hubsters? Email me at [email protected]
Deals: We have some interesting food/consumer deals this morning. Inspire Brands, which is backed by Roark Capital, has agreed to buy Sonic Corp, a drive-in burger chain, for $2.3 billion, including debt. Inspire’s portfolio includes more than 4,700 Arby’s, Buffalo Wild Wings, and Rusty Taco locations. See our brief here.
Monogram Capital Partners has made its third investment in Country Archer Jerky Co, providing $10 million to the company. Country Archer makes gourmet jerky. See our brief here.
Grubhub is buying Tapingo, a provider of an on-campus ordering platform, for $150 million. Check out our brief here.
IPO: SurveyMonkey raised $180 million when it priced 15 million shares at $12 each, Reuters reported. Investors include Tiger Global Management and Facebook Inc Chief Operating Officer Sheryl Sandberg, whose late husband, Dave Goldberg, previously ran the company.
Secondaries: Chris has a story on Ardian, which led an unusual secondary transaction that transferred energy-and-power assets off Manulife’s balance sheet, while enabling the investments and team to remain within the organization rather than spin out. Read his story here.
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