PE HUB Wire Highlights, 7.1.19


Photo of Luisa Beltran, PE HUB Senior Editor, courtesy of Buyouts Insider.

KKR to sell Kokusai Electric to Applied Materials for $2.2B; Brookfield Infrastructure, GIC to buy Genesee & Wyoming for $8.4B; Hooters of America buyers revealed

Happy first day of July, Hubsters!

Last week, we switched to a new software provider. This has caused our morning missives to arrive in a timelier manner. However, the newsletter has grown in size, so fat that it’s including briefs and stories from several days prior. We don’t want this. Typically, we try to keep the morning PE HUB wire to include only news or stories from the prior 24 hours. We are working with our developers to go ahead and fix the glitch. Please have patience with us, Hubsters.

What hurdle? More than one-fifth, or 23 percent, of funds this year have dropped the previously sacrosanct 8 percent hurdle rate, according to Part 1 of MJ Hudson‘s Private Equity Fund Research Terms. The 23 percent is up from 12 percent of funds that dropped the hurdle in 2018 and 15 percent in 2017. The hurdle, however, is far from dead, MJ Hudson said, with 60 percent of all funds, and 86 percent of buyout funds, keeping the 8 percent.

Nearly half of funds, or 47 percent, surveyed by MJ Hudson continue to charge a management fee of 2 percent. But 21 percent of funds this year are charging more than 2 percent, up from 12 percent in 2018 and 5 percent in 2017, the firm said. See the MJ research here.

Founder friendly: Inc. has compiled a list of founder-friendly PE firms that it says treat entrepreneurs as partners and operators rather than part of the furniture. The list includes both PE, some VC, and growth firms. Check it out here.

Moving on: Welcome to private equity, Carolyn Greenwalt! Greenwalt has joined Genstar Capital. She previously served as attorney adviser at the SEC.

We have several big deals this morning. Brookfield Infrastructure and GIC are buying Genesee & Wyoming Inc in a deal valued at about $8.4 billion including debt. G&W owns a portfolio of 120 short line railroads, mainly in North America with operations in Europe and Australia. Check out our brief here.

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