Randy Schwimmer and other lenders discuss private credit; Partners Group leverages onshoring

Healthcare investing scaled new heights in 2022.

Happy Fri-yay, Hubsters! Aaron here, and I hope everyone is feeling good on this Friday morning.

Today we are doing to dive into a firm that sees opportunities in onshoring, take a look at a new report on healthcare investing and showcase the latest podcast from us here at PEI Group.

Let’s dig in!

Onshoring opportunities. Moving manufacturing back to North America, revamping aging infrastructure and making the workplace safer are some of the drivers spurring demand for safety products and opening opportunities for private equity investments.

Obey Martin Manayiti caught up with Derek Lim, managing director, Partners Group about the firm’s recent move, in which it acquired SureWerx from The Riverside Company. SureWerx is a Vancouver- and Chicago-headquartered supplier of technical safety equipment and tools aimed at improving employee well-being.

“We are seeing a lot of onshore of American manufacturing, which is obviously going to benefit this business,” Lim said. The warehousing and logistics sector, which is part of the supply chain, is also seeing growing demand for work safety products, according to Lim.

You can read the whole story here.

Healthcare heartbeat. For all the talk of a slowdown in PE activity, when it came to healthcare fundraising, 2022 was a great year, according to Silicon Valley Bank, which released its annual report this morning.

Healthcare fundraising for 2022 totaled $21.8 billion, second only to 2021, when $28.3 billion was raised.

SVB expects “private-backed healthcare companies to be well-positioned to be acquirers, given the current market climate and their strong cash position from mammoth 2021 rounds.”

While IPOs halted as public healthtech stock performance fell throughout 2022, “M&A volume has remained strong, almost on pace with 2021’s record,” according to the report. “Deal sizes for M&A were down and will likely remain smaller as public market comps continue to fall. Public (and private) healthcare companies led healthtech M&A in 2022, but big tech companies also made notable acquisitions of public healthtech companies in 2022.”
I think this bodes well for what should be an interesting and busy year when it comes to healthcare investing in 2023.

Cost of borrowing. Private debt has enjoyed strong tailwinds since the global financial crisis. Now, amid rising interest rates, private debt finds itself in a new environment. We’ve just published the third installment of PEI Group’s five-part podcast miniseries Private Markets and the End of Cheap Money. In this episode, Private Debt Investor’s Andy Thomson and Robin Blumenthal discovered much optimism as the banks once again pull back from lending activities – widening the space for private debt to move into. They were also told of the difficulties borrowers are likely to face as rising rates put pressure on their ability to service debt. It’s a mixed picture as the asset class heads into a new year.

Featured in this episode: Anthony Fobel, chief executive of Arcmont Asset Management; Dominik Spanier, managing director and head of debt advisory in Germany at Lincoln International; Adam Wheeler, co-head of global private finance at Barings; Milwood Hobbs Jr, managing director and head of North American sourcing and origination at Oaktree; Michelle Handy, a managing director and the head of portfolio and underwriting on First Eagle Alternative Credit’s Direct Lending platform; Randy Schwimmer, senior managing director and co-head of senior lending at Churchill Asset Management; and Jason Strife, who works with Schwimmer at Churchill and is head of the firm’s junior capital and private equity solutions business.

Tune in. Also listen to the first episode, in which MK Flynn, editor-in-chief of PE Hub, spoke with a wide range of dealmakers, including private equity firm leaders, lenders and investment bankers, about the impact of high interest rates and other factors like high inflation on private equity-backed transactions.

Among the sources MK spoke to were: Norm Alpert, founding partner at Vestar Capital Partners; Greg Belinfanti, senior managing director of One Equity Partners; Marc Leder, co-founder and co-CEO of Sun Capital Partners; Ignacio Jayanti, CEO of Corsair Capital.

Listen here.

And in the second episode, Buyouts’ Chris Witkowsky spoke with LPs and consultants about how institutional investors are approaching the higher-rate environment, including by potentially shifting asset allocations. Among those Chris spoke with were: Andrea Auerbach, global head of private equity at Cambridge Associates; Jim Pittman, executive vice-president and global head, private equity, at British Columbia Investment Management Corporation; Craig Ferguson, managing director, private equity, with Investment Management Corporation of Ontario; and Drew Schardt, head of global investment strategy, co-head of investments and co-head of direct credit at Hamilton Lane.

Listen here.

That is a wrap for today. MK Flynn will be back with more on Monday.

It was my birthday earlier this week, so I will be celebrating all weekend, as well as hoping the Miami Dolphins squeak into the NFL playoffs. Wishing everyone a wonderful weekend!

Cheers,

Aaron