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Carlyle CEO: 'Complex financial markets' cloud outlook; OEP closes two deals; spotlight on Hg

Good morning, dealmakers.

MK Flynn here with the Wire.

The challenges facing the private equity industry are becoming increasingly complex.

One sign of the times: Carlyle reported Q1 earnings earlier this morning, and they were weaker than expected.

“We are in the midst of one of the most complex financial markets in recent memory, which is clouding the near-term outlook and impacting market sentiment,” Carlyle CEO Harvey Schwartz said in a statement.  

The former Goldman Sachs president continued: “I’m confident in the long history of our global firm in successfully investing through all cycles, and fully expect Carlyle to continue to expand and diversify our platform to drive shareholder value over the long term.”

More regulations are adding complexity too. Yesterday, the SEC voted to adopt new rules for the Form PF. We explore how the move affects private equity firms, below.

On a more upbeat note, we’ll end the Wire today with a profile of prolific software investor Hg.

Before we dive into those stories, let’s take a quick look at a pair of deals OEP just announced this morning.

Robust growth

One Equity Partners, a middle-market PE firm headquartered in New York, has completed the acquisitions of Kirey Group, an Italian IT systems integrator and technology developer, and Synergyc, a Bulgarian IT services provider.

'More is not always better'

Yesterday, the SEC adopted new Form PF rules, as regulators took the first step toward reimagining private fund policy.

For analysis, subscribe to the premium version of PE Hub Wire to read commentary from Regulatory Compliance Watch’s Bill Myers.

And for ongoing coverage of the SEC, visit Regulatory Compliance Watch.

Leaky bathtub

Private Equity International’s Carmela Mendoza has an in-depth look at Hg.

Over the past decade, Hg has backed 84 platform investments across software and services.

PE Hub Wire premium subscribers can read more about the firm’s strategy – and its results.

On that note, I’ll sign off for today. Obey Martin Manayiti will be with you on the Wire tomorrow, and I’ll be back on Monday.

Until then, happy dealmaking,

MK

Read the full wire commentary on PE Hub ...

Also of note (may require subscriptions)

General Motors’ pension fund is selling a portfolio of private equity fund stakes that could total up to $1 billion or more, sources told Buyouts.

Advisers in the secondaries market picked their mandates wisely last year as the bid-ask spread widened while buyers with finite capital faced mounting opportunities, according to Secondaries Investor‘s latest survey of intermediaries.

Since the asset class’s inception, infrastructure has defined itself as being low risk and a hedge against macroeconomic volatility. But as the industry has expanded, it’s also moved up the risk curve. (Infrastructure Investor)

Erika Lucas said she takes action when she’s angry or frustrated. Last year, she got angry enough at the persistent funding gap for women and people of color that she broke a vow she made when she left private equity to not return to private investments in order to launch VEST Her Ventures. (Venture Capital Journal)

Paine Schwartz Partners is on the hunt for its first head of sustainability, New Private Markets has learned. The sustainability-focused food and ag firm has nearly reached its $1.5bn target for Fund VI, with a raft of the US’s biggest institutional investors as LPs.

In its inaugural ranking of fund formation law firms, PERE identified two key trends that are driving the market today: a flight to quality and a focus on debt.

Oak Hill Advisors announced it has closed its Credit Solutions Fund II with commitments of $2.2 billion, surpassing an original target of $2 billion. The closing figure includes a $500 million parallel vehicle with a similar strategy for a single pension fund client. (Private Debt Investor)