KKR's second-quarter earnings beat estimates, while European companies are warned that worse is yet to come

Despite the uncertainty and upheaval in the global PE space, investments are still rolling in steadily as we head through August.

This week, AlbionVC managed UCL Technology Fund, in collaboration with UCL Business, held the first close of Fund 2. UCL Business is the university’s commercialisation company and part of UCL Innovation & Enterprise.

KKR agreed to acquire a majority stake in MasterD, a vocational training company in Spain. The investment in MasterD is the second in Europe by the KKR Global Impact fund.

Karma Ventures and byFounders led a USD6.1 million funding round in Icelandic anti-money laundering startup Lucinity. Existing investors Nordic based Crowberry Capital and US based early stage investor Preceptor Capital also participated in the founding round.

US private equity firm KKR released its second quarter financial results showing 5 per cent higher earnings for the first six months of 2020 compared to the first six months of 2019. The firm’s private equity funds increased 11 per cent, and KKR beat estimates with its flat second-quarter earnings.

Bnext, a Madrid-based fintech start-up received USD13 million from its existing investors, DN Capital, Redalpine and Speedinvest. In October 2019 DN Capital led its first investment round into the company, together with Redalpine and Speedinvest, closing a USD25 million Series A financing round - the largest in the fintech sector in Spain to date.

On Thursday, General Atlantic-backed primary care startup Oak Street Health listed on the New York Stock Exchange, aiming to raise close to USD328 million. Oak Street Health, a network of primary care centres for adults on Medicare, priced its IPO to the public at USD 21.00 per share, as predicted by Bloomberg.

In our guest feature this week, Deborah Ruff of Pillsbury Winthrop Shaw Pittman LLP, shares her take on the ruling by Tribunal de Commerce of Paris, ordering insurance giant AXA France IARD to pay Maison Rostang, a Michelin-starred Parisian restaurant EUR45,000 for two months’ worth of revenue lost due to the Covid-19 pandemic.

This was, in her view, the first indication of a critical issue that courts worldwide will have to grapple with: whether the Covid-19 pandemic qualifies as an ‘Act of God’, or force majeure, event. Private equity firms in the UK should take note, because although it’s a French judgment, it signals a milestone in the world of force majeure clauses and shines light on a critical part of the M&A process.

Private Equity Wire sat down for a video interview with Greg Bowes, co-founder and managing principal of Washington-based Albright Capital, to talk about what distinguishes ESG issues in emerging markets from developed markets, how Covid-19 will affect the push towards ESG investing seen in recent years and how private credit strategies differ from private equity in terms of managing ESG.

The latest news from the Bank of England suggests that the British economy may be in better shape than what was first predicted in May. The bank has warned that though the economic downturn will be less severe, it will take longer to recover to pre-Covid numbers as rates of unemployment continue to rise. 

Smaller privately held companies are beginning to feel the full effects of the pandemic as restructuring has been put on the back burner in Q2, resulting in loan default rates increasing. This means that US businesses will continue to struggle under the weight of defaulted loans, while European companies have been warned that they have not yet seen the worst of it.

One thing is for certain, and that is that the way investors are working and operating within the private equity space has changed in fundamental ways. PEW spoke with Jan Pensaert, founder and managing partner of Valiance, about how a move to digital working has been accelerated in the wake of the pandemic.

Pensaert also discussed what the new normal might look like, that many of the changes we’re seeing will be permanent, and that responsible investing starts on an individual level and is then lived out in the broader community. 

Karin Wasteson
Editor, Private Equity Wire
 

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