Happy Weds Hubsters!
This is Chris, on my last Wire Wednesday of the year.
What have you got going this week, anything good? We have some stuff for ya …
Call for nominees: We're starting to work on our annual Women in PE feature that runs in March. We're looking for recommendations from you, Dear Reader, on rock star women in the industry. We're mostly interested in women working on the deal side of the business, since that is the area that has traditionally been dominated by men, but we will include women who work in IR and on the LP side as well. Send your recs to me here cwitkowsky@buyoutsinsider.com by Jan. 23. Nominations should include short bios of the candidate that includes accomplishments both in their professional career as well as a snapshot of activities outside of work.
In case you didn’t know, the Women in PE feature includes 10 mini-profiles of superstar women in the business as the March cover story, along with additional feature coverage. (Let us know if you have thoughts on some topics to touch on.) Check out past coverage here.
An exit: K1 sold TeamDynamix, which provides work management software, to Level Equity for an undisclosed amount. K1 will roll a material portion of its proceeds into the company and remain a significant equity holder alongside Level Equity.
The firm first invested in TeamDynamix in 2017. During that time, the company grew revenue by 4x, the firm said in a statement. Read more here on PE Hub.
Feels off: I got into a discussion on LinkedIn this week about a Reuters article that proclaimed a flood of secondary market selling is a sign that institutional investor sellers are growing desperate and disillusioned with private equity.
“The wave of selling is the latest of several signs of stress in private markets and is another signal of investors starting to fall out of love with "alternative assets" that only recently were drawing in cash,” the article proclaimed in its all-important contextual second paragraph. See the article here.
A few things felt off about the article: while the market is still crammed with inventory in terms of LP stake sales and GP-led deals like single-asset sales (and has been all year), not much is actually reaching the finish line. That’s the big point to remember here – inventory is out there, but deals actually closing, and closing at the size first envisioned, is a much more challenging prospect.
Completing deals is challenging in this market, where buyers and sellers are separated by a widening pricing expectation gap. Buyers are being pickier than ever in terms of what they invest in, especially considering fundraising for most PE firms is tougher in today’s market. And many sellers are simply testing the market, feeling no forced need to sell. Once they get a price, invariably lower than expectations, they back off to wait until the market improves, or they sell one-off stakes in certain funds where a buyer may be willing to pay above market.
There’s also no sense that LPs are falling out of love with alternatives. At least according to recent surveys, LPs remain fully engaged with private markets and are expecting to maintain their exposure, if not continue to boost it. We know from our reporting that many public systems are slowing their commitment pacing as a way to deal with overweighted exposure to the asset class and slowing distributions. But that’s not the same as trying to get out of PE.
That’s it for me. Have a great rest of the day. Reach me with tips n’ gossip or feedback at cwitkowsky@buyoutsinsider.com or find me on LinkedIn.
Read thefull wire commentaryon PE Hub …
