L Catterton, Princeton bet on boutique fitness ; what PE investors nee d to know about DeepSeek

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L Catterton, Princeton bet on boutique fitness; what PE investors need to know about DeepSeek

Good morning, PE Hubsters! Rafael Canton here with the US edition of the Wire from the New York newsroom.

First, we will work up a sweat with a look at boutique fitness gyms and private equity’s interest in the subsector with thoughts from L Catterton, Princeton Equity Group and Baird.

Then, we have thoughts from West Monroe on the emergence of DeepSeek and what impact that has on private equity.

Finally, we have a chat with Sarah Kitchell, a partner at law firm McDermott Will & Emery about the concern around increased state-level regulatory scrutiny for healthcare investments.

Community keeps customers

Boutique fitness is a piece of the overall fitness sector, but two recent deals hint at potential private equity interest. In January, Princeton Equity Group took a minority stake in Barry’s Bootcamp, a boutique fitness studio chain. And in September, L Catterton acquired Solidcore, a fitness studio operator.

To learn more about the boutique fitness space, I caught up with Marc Magliacano, a managing partner at L Catterton; James Waskovich, co-founder and a managing partner at Princeton Equity Group; and John Bastian, a director in Baird’s global consumer investment banking group.

Premium subscribers to the Wire can learn more about what is attractive about the boutique fitness space and what challenges exist.

Disrupting AI

Chinese AI research lab DeepSeek and its R1 model dominated headlines after its chatbot app rose to the top of the app download charts of Apple and Google Play. DeepSeek’s low cost has been seen as a disruptor in the generative AI space.

Subscribe to the premium version of the Wire to learn how DeepSeek may affect PE deals.

Regulatory scrutiny

Private equity healthcare dealmakers are expecting less regulatory scrutiny from Andrew Ferguson, the new commissioner of the Federal Trade Commission. However, there is concern that less federal-level scrutiny may cause state-level lawmakers that have already opposed some healthcare investments in the past to crack down even more.

To learn more about the topic, PE Hub reporter John R. Fischer spoke with Sarah Kitchell, a partner with law firm McDermott Will & Emery.

Subscribe to the premium version of the wire to learn more about state-level regulatory scrutiny on healthcare investments.

If you have any questions, thoughts, or want to chat about deals in the tech, consumer or sports sectors, please email me at [email protected].

Tomorrow, Nina Lindholm will be with you for the Europe edition of the Wire and Michael Schoeck will bring you the US edition.

Cheers,

Rafael

Read the full Wire commentary on PE Hub ...

Also of note (may require subscriptions)

Chicago Teachers’ Pension Fund has set its private equity pacing for the year, as the pension fund attempts to taper down its exposure to the asset class. The pension fund’s board approved its staff’s recommendation to set private equity pacing at $180 million for the year, up from $50 million. (Buyouts)

Fund of funds manager Wire Group sees no reason why GPs pursuing revenue and impact targets should only be measured on financial returns — and demands the same of itself. (Agri Investor)

The energy transition should embrace some of its obstacles: Supply chain delays aside, having constraints imposed may prompt more creative and ultimately superior solutions to the question of how to move the energy transition along. (Infrastructure Investor)

Scottsdale, Arizona-based Balbec Capital has announced a final close on InSolve Global Credit Fund VI, a distressed asset-based credit fund, with $1.7 billion in total equity commitments across the flagship fund and related vehicles. (Private Debt Investor)

The global co-heads of Manulife Investment Management‘s GP-led secondaries unit are set to leave the firm after an almost six-year stint with the asset management arm of Canada’s largest insurer. (Secondaries Investor)

PACT Capital, a GP stakes firm founded by industry veterans in January, believes there’s an enormous amount of white space in the mid-market. (Private Equity International)

Investment manager T Rowe Price announced that alongside Oak Hill Advisors, its alternative credit-focused subsidiary, it will form an asset management partnership with life insurance and annuity company Aspida. (Private Debt Investor)

Private markets offer institutional investors a more powerful way of investing in climate solutions than public markets, according to a report from research company MSCI. (Private Equity International)

Deals

They said it

“As an investor you want to make sure that your concept doesn’t lose its relevancy. The secret sauce with respect to studio success is continuing to be on your front foot as fitness trends and desires continue to evolve at the consumer level.”

— Marc Magliacano, managing partner at L Catterton on what makes a successful investment in boutique fitness studios

Today's letter was prepared by Rafael Canton

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