GPs sees consolidation opportunities coming out of the downturn, EIG raises $2.6bn for fifth fund platform, Cohere Capital closes debut fund on $200m

Happy Monday!

Hope you had a great weekend.

Opps: Sun Capital sees opportunities in consolidating independent physician practices coming out of the downturn. The thought is that independent practices likely will be motivated to combine with larger platforms after the experience of the lockdown, which has closed much of the elective healthcare activity in the country, writes Sarah Pringle on PE Hub.

The firm expects near-term opportunities in specialties with less immediate disruption like home care, pharmaceutical supply chain and physician businesses focused on high-acuity care, Sarah writes.

Sun Capital also is getting calls through lenders on assets that need restructuring with challenged balanced sheets or operational issues, Stephen Cella, a principal at Sun, said. Read Sarah’s story here.

While Sun sees this happening in healthcare, this is the general idea across sectors, sources have told us. Big platforms that are well capitalized are able to withstand the loss of revenues that is catastrophic for smaller organizations. Even big platforms need to tighten and potentially cut costs, but they can keep their portfolio operations afloat until the economy reopens (which seems to be happening now).

So, perhaps the idea of merging into a larger private markets platform will become even more attractive as we come out of the downturn, meaning private equity will see even more opportunity on the other side of this thing.

Speaking of which …
Cohere Capital, formed by an ex-H.I.G. Capital executive last year, believes the dislocated market will be ripe with opportunities to work with owners in the lower mid-market for its newly raised $200 million fund.

Boston-based Cohere Capital Partners I targets tech-enabled services businesses in the lower middle market that have not yet brought in institutional capital. Read my story here on Buyouts.

The downturn may increase deal opportunities as owners, once they have more clarity on the status of their businesses, are motivated to find partial liquidity and ways to grow their organizations, according to managing partner Nik Shah, who co-founded the firm along with Daniel Gedney, principal.

Shah, 42, launched Cohere last summer. He worked at H.I.G. from 2007 to 2019. Gedney, 36, worked at H.I.G. from 2011 to 2015, where he was a vice president. Gedney also worked at Gauge Capital as a senior vice president.

Top Scoops
EIG Global Energy Partners closed its fifth fund on $1.1 billion, beating its $750 million target. The firm also raised an additional $1.5 billion through separately managed accounts that will invest alongside Fund V. Read news brief here on PE Hub.

Donation: Sun, meanwhile, donated $1 million to Boca Raton Regional Hospital Foundation’s Keeping the Promise Campaign. Sun made the donation through its partners foundation along with founders Rodger Krouse and Marc Leder and families.

Check it out here on PE Hub.

That’s it! Have a great Monday. Hit me up as always with tips n’ gossip, feedback or just to chat at cwitkowsky@buyoutsinsider.com, on Twitter or find me on LinkedIn.

HOUSEKEEPING
Compensation survey: Calling all CFOs, directors of human resources and managing partners! We would like to invite you to take part in our 10th annual Holt MM&K Buyouts PE/VC compensation survey. All participants receive an executive summary of the final survey and a steep discount on the full report. All responses are kept confidential. Click here for the survey or request an e-mail copy from Matt Cutler at matthew.c@peimedia.com

Emerging managers and covid-19 – survey
If you’re an investor or a next generation fund manager, please take 15 minutes to fill out our fourth-annual emerging manager survey – you’ll get a complimentary copy for participating. If you’re an LP, click here to get to the survey. If you’re an emerging manager, click here.

Investors, has your faith in fledgling managers changed with the onset of a market downturn? Managers, have peer-group firms adjusted terms to keep LPs interested? Understanding the sentiment of your peer-group is essential for decision-making moving forward, so we’re asking:

LPs, how actively are you backing spin-out groups and other emerging managers? How do you make commitment decisions? What terms do you negotiate?

GPs, how have you adjusted for the market downturn? What terms do you offer to anchor investors? When do you plan to raise your next fund?

We know that accurate benchmarking data is valuable; last year’s Emerging Manager Report was downloaded by over 1,450 industry pros who benefited from this guide.

We value your privacy. We will not name your organization in the study or in any associated promotional material. The deadline to complete the survey is Friday, May 29, 2020. If you have any questions, send them to Research Editor Matt Cutler at matthew.c@peimedia.com.