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NEWSLETTER | 31 Jul 2020  
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PE groups see significant inflows as US economy records worst ever quarter


Apollo Global Management released its results for the second quarter ended 30 June, 2020 yesterday. Following the completion of two deals within the insurance sector, combined with other inflows and market appreciation, Apollo’s total assets under management grew by close to USD100 billion during the second quarter and surpassed USD400 billion for the first time in the firm’s history.

“Despite a continued volatile market backdrop during the second quarter, Apollo once again delivered strong growth for our investors, reinforcing the value of our integrated global investment platform,” said Leon Black, founder and CEO of Apollo.

The figures also showed that Apollo’s total AUM grew by 33 per cent to reach USD414 billion over the past twelve months, 60 per cent of which is in permanent capital vehicles. “Against a challenging and volatile backdrop, we have demonstrated the tenacity and resilience of our team as well as the durability of our FRE growth and stability of our margins,” said Apollo co-founder Josh Harris.

Meanwhile, Apollo and other private equity groups have appealed to the courts to complain about the tactics of rival creditors during the coronavirus crisis, as reported by the FT. But Serta Simmons Bedding, one of the companies involved in the lawsuit brought by Apollo and owned by Advent International, noted that the claimants had “sponsored and participated in numerous transactions structured similarly to this transaction”.

Similarly, The Carlyle Group announced Q2 2020 results including income of USD145.9 million. Carlyle’s co-CEO Kewsong Lee commented that the group’s outlook remains prudent given an uncertain economic backdrop, “though we continue to be active and well positioned to find attractive investment opportunities around the world.”

The significant inflows and upward valuation in PE portfolios stand out among reports showing that the US economy contracted by 32.9 per cent from April through June, the sharpest decline since 1958 and its worst performance in history.

To combat the fallout that the aviation and travel sectors are facing from Covid-19, French fund Ace Aero Partenaires closed on EUR630 million.

Biotechnology companies continue to entice investors; Arthex Biotech, a pre-clinical stage life sciences company, received a EUR4.25 million investment from Advent France Biotechnology and Invivo Ventures. Eurazeo invested EUR80 million from its China Acceleration Fund in Dutch Ophthalmic Research Center, a specialist in the area of vitreoretinal surgery.

This week mid-market private equity house LDC funded the GBP30 million merger of three cloud-based managed services businesses – DoubleEdge Professional Services, Foehn and Metaphor IT to form Kerv.

The Untitled Ventures, a seed and pre-seed stage VC investor that focuses on breakthrough technologies from Eastern Europe, is raising a new fund which will invest in early growth stage tech companies in the CEE region. Also in the VC space this week; PROfounders Capital and Calm/Storm Ventures invested GBP1 million into sex therapy app Blueheart.

BGF released its H1 roundup, showing investments standing at GBP177 million, including GBP128 million into new portfolio companies and GBP49 million into existing portfolio companies.

BGF backed 24 new companies in the first half of the year, while completing eight exits. Some of its deals included Emma Bridgewater, Bayfield and AIM-listed The City Pub Group in London. The firm said its results show the importance of the growth economy during lockdown.

Some lockdown measures continue to be loosened. The threat of a second wave is still present however and the UK Prime Minister warned on Thursday that despite the hospitality and travel sectors reopening we must not “delude ourselves that somehow we’re out of the woods or this is all over”.

Karin Wasteson
Editor, Private Equity Wire


 



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