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The Wire

Mar. 4, 2022

Monroe's Ted Koenig: Invasion of Ukraine to exacerbate supply chain disruptions, raise commodities prices

Good morning, Hubsters. MK Flynn here, with today’s PE Hub Wire.

 

As the week draws to a close, I’m continuing to think about the impact of the Russian invasion of Ukraine on the private equity industry. Last night I exchanged emails with one notable dealmaker.

 

Ted Koenig, chairman and CEO, Monroe Capital, reached out to reporters to say: “I take the 2022 Russian invasion of Ukraine very seriously and as a leader in the business community, I feel it is important to take a stand: As the son of a holocaust survivor, I am shocked and deeply saddened by the events in Ukraine and the plight of the Ukrainian people. I firmly believe in a country’s sovereignty and right to self-determination and I share the concerns of citizens around the world and extend our sympathies to those affected. This senseless invasion and war must stop immediately.”

 

In a follow-up email, I asked Koenig if he’s seeing, or anticipating, any impact on PE-backed loans. He replied:

 

“Yes, we are concerned about this. Even before the Russian invasion of Ukraine, we were closely monitoring supply chain issues with our borrowers and rising commodities prices. We have added access to raw materials and commodity products pricing to our matrix of key portfolio management reviewed items, no different now than revenues, expenses, gross margin, client retention, liquidity and cash flow. Supply chain was a 2021 priority, and now with the invasion of Ukraine, it is likely to exacerbate an already difficult situation.”

 

If you have insights on how the crisis in Ukraine may affect PE deals, I’d love to hear from you. Please email me at mk.flynn@peimedia.com

 

And, for thoughts on how the crisis in Ukraine may affect private markets portfolios, see this story.

 

Switching gears. Earlier today, we published the latest installment of PE Hub’s ongoing series of Q&As with high-profile private equity pros continues today with insights from Kirby Fine, partner, ATL Partners. New York-based ATL was formed in 2014 to make private equity and preferred securities or debt investments in the aerospace, transportation and logistics (ATL) sectors, principally in North America.

 

Read the full interview here.

 

Role models. Earlier this week, PE Hub and Buyouts announced our Women in private equity: The class of 2022, and throughout the month, we’ll be featuring dealmakers from the special report in the Wire.

 

Today, let’s take a look at Clara Jackson, director, TA Associates.

 

When Jackson first encountered Caprock six years ago, it was too small for TA to invest in, but she never lost track of the wealth management firm. Since then, Caprock has evolved into a multifamily office that advises on more than $7.5 billion in client assets. Last year, Jackson led TA’s strategic growth investment in Caprock, a testament to her tenacity. Earlier this year, she was promoted to the role of director.

 

For more on Jackson and all the dealmakers in our Women in private equity report, read the story.

 

PEI Media is continuing to look for women to recognize. Private Equity International currently seeking nominations for our Women of Influence in Private Markets list 2022, which celebrates trailblazing women in alternative assets. The deadline for nominations is end of day Wednesday, March 30. The list will be published in July. The list recognizes influential and pioneering women who have achieved something notable over the past 12 months. To be eligible, nominees must work in the private funds industry, namely private equity, private debt, infrastructure, venture capital or real estate. We welcome nominations for women working in a variety of roles at investment firms (such as on the investment team, IR, operations, marketing and portfolio support), LPs, as well as advisory firms (such as law firms, placement agents, capital advisory firms, fund administrators). Submit your nomination here.

 

In case you missed. Earlier in the week, Private Equity International announced the winners of The PEI Awards, which celebrate the private equity industry’s standout firms, highlighting their contributions to the worlds of fundraising, secondaries and more. Click here to read about all of the winners.

 

And finally, today is Employee Appreciation Day, so it’s a good moment to recognize all the editorial team members who work on PE Hub and the Wire: Thank you to Chris Witkowsky, Chris Wood, Aaron Weitzman, Karl Shmavonian, Kirk Falconer and Iris Dorbian.

 

Wishing everyone a safe and healthy weekend,

MK

 

Read the full wire commentary on PE Hub ...

Also of note (may require subscriptions)

Bright lights in even darker times: Carlyle Group’s head of impact Megan Starr and Ukrainian private equity firm Horizon Capital deserve special mention in this year’s PEI Awards 2021. (Private Equity International)

 

Orlando Bravo, co-founder and managing partner of PE giant Thoma Bravo, "says the mantra of ‘growth at all costs’ is over and that investors are slowly shifting their focus from momentum to fundamentals and profitability." (CNBC)

 

"Private-equity firm Hellman & Friedman LLC has taken a 7.5% stake in Splunk Inc. worth about $1.4 billion, according to people familiar with the matter, a big bet on the software company and its incoming chief executive." (Wall Street Journal)