Morning all, Craig McGlashan here with the Europe Wire from the London newsroom.
Europe is the hot destination for private equity right now and there’s few sectors creating more buzz than artificial intelligence. But GPs looking to tap into both need to be aware of the EU’s Artificial Intelligence Act – something that could impact investments in unexpected ways.
This morning, we speak to law firm Covington’s Lyndsey Laverack and Moritz Hüsch to find out more about the Act and how it affects dealmaking.
Sticking with the optimism over European dealmaking, we’ve got news of another potential portfolio company listing, involving Mutares, as well as an exit by EQT.
We finish with news that the sale of Dorna Sports by Bridgepoint and CPP Investments looks to be nearing completion after the buyer won sign-off from the European Commission.
Act now
New obligations from the EU’s Artificial Intelligence Act on general-purpose AI (GPAI) models are scheduled to come into effect in August, with other obligations slated for the coming years.
With AI beginning to touch all forms of business, how should dealmakers factor these new regulations from the Act into their decision-making, as well as the other provisions that came into force last year?
To find out, PE Hub spoke to Lyndsey Laverack, a London-based partner in the global private equity practice, and Moritz Hüsch, a Frankfurt-based partner and co-chair of the technology industry group and the AI and Internet of Things practice groups, at law firm Covington.
Learn about some of the potential effects the Act could have on M&A, how it approaches the regulation of AI and where a review of AI should fit in the due diligence process in the premium version of the Wire.
To find out more about how the Act can apply to entities outside the EU, how non-compliance penalties might be applied and how PE firms could be impacted by breaches of the Act by their portcos, check out the full interview.
Warming up
Is dealmaking set to warm up as we head into summer? One London-based M&A lawyer who works in the UK mid-market I was speaking to this week expects it to.
Find out his thoughts in the premium version of the Wire.
There do seem to be some bright spots appearing for European deals.
On top of more and more US GPs looking to get involved with deals in the continent, there are signs that the long-dormant IPO market might be cracking open.
Mutares said yesterday that it’s planning to list its portfolio company Terranor Group in Stockholm, while Blackstone last week announced plans to list international gaming platform Cirsa Enterprises in Spain.
Meanwhile, in an interview alongside CEO Stephen Schwarzman with our colleagues over at Private Equity International, Blackstone president and chief operating officer Jon Gray said that the biggest development this year in PE generally will be the re-emergence of M&A activity at scale and the return of IPOs.
Other IPO activity recently came from fellow PE giant EQT, whose portfolio company Enity, a specialist mortgage provider, began trading on Nasdaq Stockholm in mid-June.
The GP also just announced another exit, albeit via another route. The firm will exit its stake in Recover, a Scandinavian property remediation specialist, alongside minority investors. Industrial investment company Pangea is the buyer.
Sign-off
Sticking with exits, where Bridgepoint and CPP Investments’ sale of Dorna Sports, a global sports management, media and marketing company and MotoGP rights holder, looks to be going ahead after buyer Liberty Media Corporation received unconditional approval from the European Commission to proceed.
Editor’s note: Bridgepoint owns PEI Group, the publisher of PE Hub.
That’s everything from me today. Obey Martin Manayiti will bring you the US Wire later today and I’ll be back with you from London tomorrow.
Cheers,
Craig
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