PE HUB Wire Highlights, 11.8.19


private equity, mergers, M&A

Alaska Permanent CIO will be cautious with private markets, Carbonite draws final bids from PE firms

 Happy Friday!

Hope your week went well, Hubskis. I’ll be on the Wire with you next week for Luisa, who is off. Any burning topics we should address? Reach me at cwitkowsky@buyoutsinsider.com with your thoughts.

We’ve got some interesting things happening in the private markets world.

MoreAlaska Permanent Fund has long been a major investor in private equity funds. And it’s been innovative in building direct exposure to private markets investments. It looks like the sovereign fund will continue to grow in importance as an LP.

Marcus Frampton, chief investment officer at Alaska Permanent Fund, told Bloomberg in a recent video that the sovereign fund will grow its allocation to private equity from 13 percent to around 19 or 20 percent over the next five years.

Even with that growth in mind, Frampton said he’s going to be cautious with private equity because of concerns he has around valuations.

“I think that there are some deals getting done in late stage venture and in mega-cap buyouts that people will regret later,” Frampton said. “We’re a little more involved in smaller market buyouts on the margin than some of our peers and I think valuations are a little bit lower, and I think the sponsors have a little bit more control of the companies.”

Frampton sees some red flags in the market that could indicate a turn in the bull market. “If you look at credit spreads, valuations on public equities or private equities and then where we are in the cycle, late in a 10 or 11-year expansion, it is concerning,” he said. “I’m not calling for the cycle to turn but there’s certainly a lot of red flags out there, so we want to be ready. At some point the cycle will turn.”

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