SEE WHATS NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 128 - February 14th, 2014: • New Source for Private Equity Performance Data and Analysis • Large Buyout to Grow French Car Park Specialist • New Mega-Funds May Have Trouble Finding Mega Targets • Global M&A Stats Show Private Equity is Finding the Exit • Cleantech Investment Declines Again in 2013 • Quote of the Week: Bitcoin Anomaly

1. DIGEST 128
1
New Source for Private Equity Performance
Data and Analysis
Large Buyout to Grow French Car Park
Specialist
2
New Mega-Funds May Have Trouble Finding
Mega Targets
3
Global M&A Stats Show Private Equity is
Finding the Exit
Cleantech Investment Declines Again in 2013
4
Quote of the Week: Bitcoin Anomaly
February 14, 2014

2. NEW SOURCE FOR PRIVATE EQUITY
PERFORMANCE DATA AND ANALYSIS
There are a growing number of performance benchmarks for the PE industry coming out of partnerships between industry players and academic institutes, as well as commercial providers. Newer ones
like Burgiss Capital IQ and Pitchbook, join established data providers, such as Preqin and Thomson
One. This month another was officially launched, the INSEAD–Pevara Private Equity Navigator, a publication that provides analysis “assessing the overall activity and performance in the private equity
industry by combining a reliable and distinct dataset with the analytical rigor of a top academic institution”. The data set is entirely based on cash flows for 2,650 funds reported by hundreds of LPs on
Pevara’s platform. The inaugural issue took a look at disbursements versus capital calls since 2005, as
well as comparing US and European buyout rates for return using various mathematical models. Analysts found that distributions bounced back strongly in 2010, more than tripling to USD 106.34 billion
and in 2012 saw distributions exceeding capital calls, which is a fairly rare trend. It is a sellers’ market,
says the report, and it is easier to find the exit than it is to find new deals to invest in. (Image source
Private Equity Navigator)
LARGE BUYOUT TO GROW FRENCH CAR
PARK SPECIALIST
This week’s buyout of the week is an equity stake
taken by Ardian (new name for AXA Private Equity)
and Crédit Agricole Assurances in VINCI Park, a
company that designs, builds and runs car parks and
infrastructure, which has a valuation of EUR 1.96
billion, according to a statement issued by Ardian.
The transaction would see a shareholder breakdown of 37.5% held by Ardian , same for Crédit Agricole
Assurances and 5% by VINCI Concessions . The aim is to finance VINCI Park’s growth, especially
outside France, working with the current management, specifically in high growth markets such as
North America, Latin America and Asia.
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3. NEW MEGA-FUNDS MAY HAVE TROUBLE
FINDING MEGA TARGETS
Private equity firms, especially those that recently closed mega funds, may have difficulty
finding good sized deals, according to the latest
issue of PIOnline. Although the number of deals
made by buyout funds rose in 2013 to near precrisis levels, says the report, sizes of the deals
were smaller. Citing data from Preqin, the majority of transactions in both 2012 and 2013 were
valued at less than USD 100 million. This is far
below the estimated USD 500 million or so per
transaction that comes with raising multibilliondollar funds, according to PIOnline. Other data
sources suggest that mega deals will be making
a comeback. The report offers several different
scenarios about where the larger deals will
come from, such as secondaries or shifting down market to mid-market sized transactions, and suggests that PE investors will have to pay attention to strategy and focus in order to compete this year.
Elsewhere Black Rock analysts also noted the sellers’ market in the PE sector, concluding that since
new fundraising slowing, competition should decrease for deals. And that debt markets will be the key
influencer on the pace of dealmaking. It is quite positive on alternatives to aid diversification based on
recent analysis of alternative returns (see graphic). (Image Source: Black Rock Currents)
GLOBAL M&A STATS SHOW PRIVATE
EQUITY IS FINDING THE EXIT
The latest data from Dealogic reveals that M&A
exit volume by private equity and venture capital
investors is USD 30.4bn in 2014 YTD, more than
double the $14.0bn announced in 2013 YTD and
the highest YTD volume since 2007 (USD 31.4bn).
In contrast to volume however, global exit activity
is down 27% to 80 deals so far in 2014 from 109
deals announced in 2013 YTD, marking the lowest
activity since 2010 YTD (57 deals). This news, like
several other reports highlighted in the DealMarket Digest this week underlines that it PE funds
are finding buyers more easily these days. The preferred exit route is trade sales, which account for
90% of total volume, the highest share since 2000 YTD (98%). Ten trade sales with a value of greater
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4. than a billion dollars have been announced in 2014 YTD, with the USD 5.8bn pending bid by ABINBEV
for Oriental Brewery Co, which is backed by PE investors. The Carlyle Group leads the ranking in
2014 YTD with USD 9.8bn, followed by KKR & Co with USD 8.6bn and Affinity Equity Partners with USD
5.8bn. (Image source: Dealogic)
CLEANTECH INVESTMENT DECLINES
AGAIN IN 2013
It looks like clean energy investment hit a peak in 2011 as investment totals declined in 2012 and 2013,
according to Bloomberg New Energy Finance. Last year, global investment in clean energy was USD254bn, down from USD 286.2bn in 2012 and USD 317.9bn in 2011. Decreases are due to the lower
cost related to deploying large photovoltaic plants (which is actually good news), and a change in the
market dynamics in Europe and the US. The two biggest investing countries are now China and the US,
with China investing USD61.3bn in clean energy last year and the US investing USD 48.4bn. The investment figures don’t show is that solar power installations are increasing and actually grew by almost
20% which is a new record, according to BNEF. (Image source: BNEF)
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5. QUOTE OF THE WEEK - BITCOIN ANOMALY
“…a new standard may have been set on May 18, 2010, when two pizzas
with a total price of $25 were purchased using 10,000 Bitcoins instead of
cash. Those 10,000 Bitcoins were worth $8.7 million by the end of 2013 as
the virtual currency has since soared in value - arguably creating the most
one-sided transaction since the island of Manhattan was purchased for $24
in 1626…”
Who said it: David Harris, Chief Investment Officer and a Managing Director
of Rockefeller & Co.
In Context: : Writing about the valuations of Internet stocks versus the S&P
500, as well as other technology equities, David Harris suggests that Bitcoin’s current valuation is
“merely an anomaly” due to its “relatively miniscule” size and infancy as an asset class. Speculative
buying is a trend in the Internet sector, he suggests, and the price action in Bitcoin is “vaguely reminiscent” of the dot-com bubble of 1999, when traditional means of valuing assets through revenues
and profits were dispensed in favor of new-era valuation techniques like page views and clicks. As an
investor he says it is more relevant to examine the returns from larger, more liquid assets valuations
which are apparently within a more normal P/E ratio, showing little evidence of speculation, particularly
emerging markets and commodities. (Image source: Rockefeller Financial)
Who we found it: Rockefeller Global Foresight
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6. The Dealmarket Digest empowers members of Dealmarket by providing
up-to-date and high-quality content. Each week our in-house editor sifts
through scores of industry and academic sources to find the most noteworthy news items, scoping trends and currents events in the global private equity sector. The links to the sources are provided, as well as an editorialized
abstract that discusses the significance of the articles selected. It is a free
service that embodies the values of the Dealmarket platform delivers: Professional, Accessible, Transparent, Simple, Efficient, Effective, and Global.
To receive the weekly digest by email register on www.dealmarket.com.
Editor: Valerie Thompson, Zurich
DealMarket
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