The Wire

Dec. 24, 2020

Quad-C sells stake in life sciences packaging company Inmark, Centre Lane sells GP stake to Investcorp, More U.S. GPs move to Euro-style waterfalls  

Morning!

 

This will be our last PE Hub Wire of the year … and what a year, right? Amid the chaos of the pandemic, social unrest and election madness, private equity moved forward without much distraction or pain.

 

We haven’t seen a flood of PE-backed bankruptcies, despite doom proclamations that highly leveraged companies were poised for collapse. (Even as the government chose to exclude PE-backed companies from emergency aid). Fundraising did not seize up and even first-time fund managers were able to finish off marketing and get their debut pools closed.

 

Instead, what we saw was private equity pull inwards, take stock of the situation and help their companies weather the closing of the markets in the pandemic. And then, as they emerged from the paralysis of the spring, we’ve watched the M&A markets return. Perhaps the lasting impact of the pandemic lockdown on private equity will be more GPs figuring out ways to hold certain assets longer.

 

It’s a testament to the resiliency of private equity as a business model: portfolio companies survived, investors got paid back, the apocalypse did not occur (at least in this corner of the market).

 

What this year showed is that private equity is adaptable and has the ability to survive, and in some cases, thrive, through market contractions. Seems like this experience should lead to even more money flowing into the industry.

 

We'll see you in the new year! 

 

Read the full wire commentary on PE Hub.

 

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Note to Readers: It's that time of year ... for the 21st time, the editors of PE Hub and Buyouts honor exceptional buyouts with our Deal of the Year Awards.

 

Winners are chosen in seven categories: Deal of the Year, Large-Market Deal of the Year, Middle-Market Deal of the Year, Small-Market Deal of the Year, Turnaround of the Year, International Deal of the Year, and Secondaries Deal of the Year.

 

Go here for more information and to read about rules and methodology. Also check out past winners. Last year, New Mountain took the crown with its exit of Equian.

 

If you have additional questions, email Private Equity Editor Chris Witkowsky at [email protected].

 

Also of note (may require subscriptions)

Waterfall: More GPs are offering European-style waterfall structures, according to fresh research from MJ Hudson. Around 40 percent of U.S. managers offered Euro-style payouts, which only pay the GP carried interest until LPs have been paid back at the end of a fund life. Read it here.