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Potential tariffs cast uncertainty over consumer deals; Huron invests again in busy HVAC industry

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

First, let’s begin with a conversation about the uncertainty surrounding tariffs on goods from countries outside the US. The lack of clarity is already affecting deals in the consumer sector, according to sources interviewed by PE Hub.

Next, we have a look at a recent HVAC deal. The Exigent Group, a portfolio company of Huron Capital Partners, and its operating company Smith-Boughan, have acquired Premier Mechanical. The deal follows up on the busy category of HVAC which has seen steady dealmaking.

Finally, we have a look at a report from the Deloitte Center for Financial Services about how alternative exit strategies can lead to private equity dry powder reaching an all-time high of $3.8 trillion globally.

Uncertainty kills deals

After the inauguration this week, one of the central topics swirling around private equity is the new administration’s stance on tariffs. After his inauguration on Monday, President Donald Trump told reporters on Monday that he is considering putting 25 percent tariffs on goods from Mexico and Canada. China has been another country of focus. However, Trump has not signed any executive orders related to tariffs yet.

I wrote about the potential impact of tariffs on dealmaking in the consumer sector and how dealmakers in the sector are reacting to it.

PE Hub will be keeping an eye on the conversation around tariffs in the consumer sector.

Subscribe to the premium version of the Wire to learn how dealmakers are seeing tariffs and how it can impact PE dealmaking.

HVAC deals a plenty

In a recent deal, The Exigent Group, a portfolio company of Huron Capital Partners, and its operating company Smith-Boughan, have acquired Premier Mechanical.

PE Hub has been following the HVAC space for some time now. PE Hub reporter Obey Martin Manayiti analyzed about 80 residential and commercial HVAC deals that we covered between 2022 and 2024 in a November story.

Premium subscribers to the Wire can learn more about the Huron deal and PE Hub’s story that highlights why HVAC is attractive to investors.

Exit strategy

PE firms can potentially unlock 20 percent annual growth in private equity dry powder through 2028, reaching $3.8 trillion globally according to a report from Deloitte Center for Financial Services. The figure would be an all-time high. 

Subscribe to the premium version of the Wire to look at the report as well as insights from Deloitte.

That’s it from me today. If you have any questions, thoughts, or want to chat about tariffs or any other topic, 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)

Alameda County Employees’ Retirement Association is reviewing changes to its private equity investment policy that will reshuffle the asset class’s subcategories and delegate continuation fund responsibilities to the system’s staff. (Buyouts)

SLM Partners has held a final close on €30 million for its Silva Europe Fund, following an adjustment of the strategy. The vehicle has been rejigged into a permanent crop-only play and a separate fund will now execute the strategy’s planned forestry investments. (Agri Investor)

Argos Wityu, the mid-market European private equity firm, has pushed through a tough private markets fundraising environment to close its debut climate-oriented fund just above its target. The firm has raised €337 million, surpassing its €300 million target. (New Private Markets)

A new model for farmland investing? Peoples Company is striking a balance between cooperative and competitive farmland services as it deploys institutional capital while supporting GP’s asset management. (Agri Investor)

As the California Public Employees’ Retirement System considers the future direction of its investment portfolio, including the role private markets investing will play, the system’s board got advice from Oaktree Capital Management’s co-founder Howard Marks. (Private Debt Investor)

PE deals are migrating from generalist to sector-orientated models: Fund managers are increasingly focusing on specialization in the dealmaking and operating stages in order to gain a competitive edge. (Private Equity International)

After holding a first close on its first dedicated data center fund last year, asset management giant PIMCO has increased its target size to €1 billion following its latest round of fundraising, Private Equity Real Estate has learned.

San Francisco-based investment manager TPG has acquired a 50 percent stake in London-based manager M&G Real Estate’s £700 million ($863 million; €828 million) UK logistics portfolio, forming a new joint venture called Active Growth Logistics Partnership, the firms announced. (Private Equity Real Estate)

Evercore’s secondaries head in the Asia-Pacific region is departing after nearly five years at the firm, Secondaries Investor has learned.

Portfolia has closed its third FemTech fund at $4.15 million from 249 investors. The firm primarily raises from high-net-worth individuals, but it says a few family offices and “some very small institutions” participated in this fundraise. (Venture Capital Journal)

Deals

They said it

“The potential impact for these tariffs is very real, and it’s going to be very tangible and very much felt by the US consumers.”

— Nate Pund, managing director in Houlihan Lokey’s consumer group on the impact of tariffs on the consumer sector in PE

Today's letter was prepared by Rafael Canton

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