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Audax seeks advisers for sale of Liquid Environmental Services; Powell’s comments provide no comfort to exit-starved PE

Morning Hubs!

• How the fall of SVB spurred ICD’s growth before sale to Tradeweb

• Audax interviews advisers to shop Liquid Environmental Solutions

Comments from Fed chair Jerome Powell yesterday will not provide much comfort to the private equity industry, which has sustained a muted dealmaking environment in this era of more expensive debt. While M&A has seemed to be opening up more this year, what is really under scrutiny is PE firms’ ability to exit older investments.

“The pushback of rate cuts, as seen by the public market reaction, is not a positive for valuations. The combination of valuation pressure and expensive capital is leading to longer hold times for financial sponsors,” Jeremy Swan, managing principal of CohnReznick’s financial sponsors & financial services industry practice, told me.  

“This combination of factors has put significant downward pressure on exit activity which will lead to continued slow distributions,” he said. “Sponsors that are investing out of funds that were raised 3+ years ago who have not seen the quantity or quality of exits that they expected, will bear the brunt of the fundraising pain. While exits will continue to happen, the slow pace, and potentially pressured valuations, will lead to a continuation of the challenging fundraising market.”

Speaking of exits

Parthenon Capital recently announced the sale of its portfolio company Institutional Cash Distributors, which provides institutional investment software. The company saw an increase in interest amid the regional banking crisis last year, writes Obey Martin Manayiti on PE Hub.

Read more in the premium version of the Wire.

Bake off

Audax Private Equity is exploring the sale of Liquid Environmental Solutions, which provides non-hazardous liquid waste management and disposal services, writes Michael Schoeck on PE Hub.

Learn more at the subscriber version of the Wire.

That’s it for me! Have a great rest of your Wednesday. Hit me up with your good tips n’ gossip, feedback or Scotch recommendations at [email protected] or find me on LinkedIn.

Read the full wire commentary on PE Hub ...

Also of note (may require subscriptions)

Seine Capital, staffed with a roster of secondaries professionals, is raising its debut secondaries fund targeting $150 million, sources told Buyouts.

Mantra Investment Partners’ former head of secondaries Fabrice Moyne has launched a new secondaries shop, which is eyeing a first close for its debut fund. (Secondaries Investor)

Enlightenment Capital is seeking $600 million for its latest flagship fund for investments across government services, aerospace, defense and technology. (Buyouts)

Verdane already has acquisitions in mind for its new portfolio company Corlytics, Nils Vold, partner at Verdane, told PE Hub Europe. “We are already working on a few M&A opportunities together with the management,” Vold said.

Charlesbank Capital Partners is seeking $1.1 billion for a second buyout offering earmarked for tech opportunities in the lower mid-market. (Buyouts)

Specialist European digital infrastructure manager DTCP has reached a final close on the second vintage of its flagship fund, Digital Infrastructure Vehicle II, raising €1.1 billion through DIV II and a further €440 million in co-investment capital. (Infrastructure Investor)

While real estate investors have yet to account for embodied carbon in their investments, buyers will be increasingly taking it into account when underwriting assets in the future, members heard at the PERE Network Decarb Forum in London.

In the midst of the toughest fundraising market in recent history, Andreessen Horowitz closed on $7.2 billion for several new funds, according to an announcement by general partner and co-founder Ben Horowitz. (Venture Capital Journal)

They said it

“We think policy is well positioned to handle the risks that we face. Right now, given the strength of the labor market and progress on inflation so far, it’s appropriate to allow restrictive policy further time to work.”

— Fed chair Jerome Powell talks about the Fed’s efforts to control inflation.