Blackstone and the rise of special opportunities strategies

View this email online

The Wire

Oct.4, 2021

Blackstone and the rise of special opportunities strategies, GTCR buys PPC from MSCP with more dealmaking to follow

Morning, everybody!

GTCR is ready to unlock more value at PPC Flexible Packaging, which under seller Morgan Stanley Capital Partners emerged as a differentiated, scale player through its focus on growthy end-markets. PPC’s offerings span cleanroom packaging for healthcare and medical applications, snack and organic brands, as well as specialty produce, nutraceutical and bakery end markets. Fueled by an aggressive M&A playbook, PPC under MSCP saw its EBITDA grow to around $50 million of EBITDA today, up from the single-digits of EBITDA when it backed the company in 2017, a source familiar with the matter said. Read my full report on PE Hub.

Elsewhere... private equity firms are constantly changing their tactics in order to find new frontiers where others are not spending time. Over the last decade, that has led to the proliferation of firms putting capital to work across a new asset class.

Blackstone’s Tactical Opportunities strategy, hatched a decade ago by David Blitzer, is nimble, focused and all-weather. Back in 2011, as the world worked to make a comeback from a deep recession, Blitzer spotted some opportunities that were not being taken up by his firm – or, for that matter, by anyone else. This, Blitzer says, together with financial industry restructuring in the wake of the crisis, “left a supply gap.” More than this, Tactical Opportunities helped inaugurate a new investment niche – broadly known as special opportunities – that seems to be catching on in private markets. Presently, a dozen or so PE firms offer these strategies, or ones that resemble them. Along with Blackstone, they include Apollo Global Management, Ares Management, Brookfield Asset Management, Sixth Street and TowerBrook Capital Partners.

For more on this evolution, read Kirk Falconer’s full report on Buyouts.

That’s it for me! Have a great week ahead, and as always, hit me up at springle@buyoutsinsider.com with your comments, tips or anything else!

Read the full wire commentary on PE Hub...

Also of note (may require subscriptions)

Newbies: LP confidence is soaring in emerging managers, in part because they are so hungry. Those who have started their own firms, using money out of their own pockets, have everything to lose. In recent newbies, Tidemark Capital, formed by ex-TCV general partner David Yuan, closed its debut fund on $575 million last week. Elsewhere, Newlight Partners, formed by a group of ex-Soros Fund Management PE execs, is raising its debut independent pool that could target around $1 billion. Read more on Buyouts.

Winner: A consortium led by U.S. buyout firm Clayton, Dubilier & Rice won the bidding war for U.K. grocery chain Morrisons, an almost $9.4 billion bet that highlights the extreme lengths private-equity firms are willing to go amid a global deal frenzy, writes the Wall Street Journal. The CD&R-led group emerged as the front-runner after outbidding SoftBank Group Corp's Fortress Investment Group and its partners in an unusual one-day auction held Saturday to decide the victor. Read more on WSJ.