Good morning, Hubsters. MK Flynn here with today’s Wire, including news about CalPERS, KKR, GreyLion and two-time Super Bowl champ Eli Manning, plus insights from private equity leaders, including Beatrice Mitchell.
Secondaries. California Public Employees’ Retirement System, a bellwether LP that often sets the standard for private equity investing, is embarking on what could be an historic sale of private equity fund stakes. CalPERS engaged Jefferies to sell up to $6 billion in private equity fund stakes, three sources told Buyouts.
A slew of traditional LP portfolio sales have hit the market since the fall, with prices high and buyer interest piqued by more diversified investments beyond the single- or concentrated asset deals.
Lower middle market. GreyLion Capital shared the firm’s strategy with PE Hub while unveiling two new investments: Webconnex LLC, a developer of ticketing and event management software; and Norwood Sawmills, a provider of portable consumer-sized sawmills. While in different sectors, both targets are emblematic of the New York-based PE firm’s strategy. GreyLion, which focuses on the lower mid-market, was spun out from Perella Weinberg Partners back in 2020. “Our strategy is less focused on trends in each sector and more on identifying strong management teams at good companies that have a reason to win within the sectors we focus,” said managing partner Chip Baird. “The lower mid-market, where we seek to invest, is the growth engine of the US economy and we believe this will continue to be the trend going forward.”
Fundraising. KKR announced this morning the final closing of KKR Health Care Strategic Growth Fund II, a $4 billion fund dedicated to health care growth equity investment opportunities primarily in North America and Europe. “At nearly three times the size of its predecessor, HCSG II not only speaks to the attractive investment opportunities that we are seeing but also demonstrates the strength of our health care investment team, our Health Care Strategic Growth strategy, and our strong investment performance to date,” said partner Alisa Amarosa Wood.
Seller’s market. “Today’s heated M&A activity is primarily driven by the abundance of private equity money in the market,” Beatrice Mitchell, co-founder and managing director of Sperry, Mitchell & Co. told PE Hub in our Outlook 2022 series of Q&As. The funding overhang is at a record level, and PE sponsors are projected to raise a record amount of fresh commitments in 2022. Too much money chasing too few deals. In addition, after a dramatic covid-induced pause in the spring/summer of 2020, the American economy has come roaring back. While some sectors are still experiencing hard times, many companies are growing and generating nice returns. Business owners understand that, given the huge buyer appetite, this is a seller’s market. In addition, many owners of private companies have found the past year to be very stressful and are simply ready to sell and move on. Every indication is that the party will continue into 2022.”
Are you ready for some football? Two-time Super Bowl champion Eli Manning has joined Brand Velocity Partners (BVP), a private equity firm focused on acquiring and growing consumer businesses. Manning will be involved in all aspects of the firm, including supporting its growth, sourcing new investment opportunities and enhancing the value of its portfolio companies. Manning was first introduced to BVP as an investor in 2020 and became a “brand ambassador” for BVP-owned BBQGuys in March 2021. Manning’s father Archie also invests in BBQGuys.
Nominations. We’re looking for your recommendations for rock star women in private equity, mostly on the deal side (which has been historically male-dominated). Deadline to get in your recs is January 17, for publication in March.
Our annual Women in Private Equity project comprises 10 mini-profiles of highly regarded women in the industry and a feature story about some burning topic around the status of women in the industry. Check out our past coverage of Women in PE here. Reach Buyouts editor Chris Witkowsky with questions and recommendations at email@example.com.
Deal of the Year: Get your nominations in now for your best exits (either full or majority) that closed in 2021. Awards are given in seven categories: overall deal of the year, large-cap, middle-market, small-cap, international, turnaround and secondaries. Deadline is Friday, Feb. 11. Send to Chris Witkowsky, private equity editor, at firstname.lastname@example.org. Go here for all the rules and regs!
Finally, if you missed our Outlook 2022 Q&As last week, see our interviews with The Riverside Company vice chairman Pam Hendrickson; Grain Management founder David Grain; Monroe Capital president Zia Uddin; and FTV Capital managing partner Brad Bernstein.
See you tomorrow, MK