William Blair CEO on valuations; Fairview Capital on women, minorities in PE & VC

Good morning, dealmakers. MK Flynn here, with today’s Wire.

Looks like Merger Monday is back in corporate dealmaking, with Frontier Group buying Spirit Airlines in a $6.6 billion deal, as the travel industry strives to recover after nearly two years of the pandemic.

Here’s what’s going on in the world of private equity:

Valuation view. My series of Q&As with high-profile PE pros continues today with William Blair’s Brent Gledhill. He was elected CEO of the Chicago boutique last month, having been named president last year. In the interview, Gledhill share his thoughts on a wide range of topics, including today’s high valuations:

“I think valuations are a sector-by-sector story,” he said. “There are always sectors that feel as though they have reached higher valuations than historical levels. Less of the story to me is of the overall economy being high. Valuation is a view of the future and growth is always the primary impact on valuations. Many sectors – consumer services, logistics, distribution, for example – are terrific sectors with higher valuations today that align with long-term trends. For instance, the growth rates and industry dynamics underpinning those sectors are yielding much greater efficiency and productivity, while demand is also growing.”

I asked Gledhill how private equity has changed since he joined William Blair as an investment banker back in 1997.

“Two primary factors that have changed over the last 25 years are the speed and accessibility of sophisticated information, which has led to a larger global arena for the investment business than before,” he said. “With greater information, speed and access has come a convergence of the public and private markets, with private equity experiencing tremendous growth.”

For more, read the whole interview.

And check out our previous Q&As with Pam Hendrickson, vice-chairman of The Riverside Company; Randy Schwimmer, co-head of senior lending at Churchill Asset Management and founder and publisher of The Lead Left; David Grain, founder and CEO of Grain Management; and Beatrice Mitchell, co-founder and managing director of Sperry, Mitchell & Co.

Small but growing slice of the pie. Fairview Capital has just published its annual Market Review of Woman and Minority-Owned Private Equity and Venture Capital Firms, and there’s good news and bad news. “In 2021, Fairview found that the universe of woman and minority-owned firms grew to 627 firms, up from 502 firms in 2020, representing an increase of 25% over the prior year,” according to the report. “Fairview observed a record 280 woman and minority-owned firms in market raising capital during the year, up from 234 firms in 2020. In a year that featured record levels of capital inflows into the private markets, woman and minority-owned firms targeted 6% of the capital estimated to be raised by the private equity industry in 2021, up just modestly from 4% in 2020.” Founded nearly 30 years ago by Laurence Morse and JoAnn Price, Fairview Capital is one of the largest minority-owned investment companies in the US, with over $10 billion in aggregate fund capitalization since inception. The firm builds portfolios targeting venture capital, diverse and emerging managers, and direct co-investments.

Editor’s Note. On March 1, Buyouts will publish our annual Women in Private Equity list, featuring 10 stellar dealmakers.

Deal of the Year. There’s just a few more days left to send in your nominations; the deadline is Friday, Feb. 11. So get your candidates in now. Send them to Chris Witkowsky at cwitkowsky@buyoutsinsider.com. Visit here for more info about the awards.
40 under 40. Private Equity International is calling for nominations for its fourth annual rising stars of private equity list. PEI’s 40 under 40: Future Leaders of Private Equity will be published online and in the Future of Private Equity Special in early May. Submit your nomination by end of day Thursday 17 February here. The list will feature individuals across five categories: Investor (LP); Fundraiser; Dealmaker; Lawyer; Operator.

Hope you have a good day,
MK