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Uncertainty over tariffs may stall dealmaking; KKR backs Henry Schein citing ‘tremendous growth potential’

Good morning, PE Hubsters! Rafael Canton here with the US edition of the Wire from the New York newsroom.

On this Wednesday, we’ll start the Wire with a look at tariffs. PE Hub has been listening to the conversation around tariffs in the private equity space. We’re continuing with a look at how tariffs have caused dealmakers to hit the pause button on certain subsectors.

Next, we have a look at how meaningful tax reform could stimulate dealmaking in JP Morgan’s Alternatives 2025 Outlook.

Then, we have another look at dealmaking. 87 percent of dealmakers predict an increase in activity this year according to SS&C’s 2025 Global M&A Dealmakers Sentiment Report.

Finally, we have a deal from KKR which has made an investment in healthcare and dental care provider Henry Schein.

Tariff talk

Dealmakers "have to hit the pause button because now there's uncertainty,” Karl Roberts, managing director at business advisory firm Portage Point Partners, told PE Hub about the impact of potential tariffs on PE deals.

Premium subscribers can know more about what subsectors can be affected and what the long-term impact of tariffs could be.

For more on how tariffs may affect transactions, see:

• Consumer dealmakers wait to see how tariffs will play out under new administration
• Tariff impact on PE deals: What’s exposed, what’s resilient?

Fiscal policy

While PE folks have a mixed reaction to tariffs (depending on the companies they own), they would welcome tax reform. Meaningful tax reform could set the stage for growth in private equity dealmaking according to JP Morgan’s Alternatives 2025 Outlook.

Subscribe to the premium version of the Wire for access to the report.

Predicting activity

Potential growth in private equity dealmaking has been an expectation in other circles as well. 87 percent of dealmakers predict an increase in activity this year according to SS&C’s 2025 Global M&A Dealmakers Sentiment Report. 400-plus dealmakers were surveyed across private equity, corporate advisory and investment banking.

Premium subscribers can read more about the report and its key findings such as what sectors are generating the most interest.

Dental deal

KKR has made an investment in Henry Schein Inc. Based in Melville, New York, Henry Schein is a provider to dental and medical practitioners.

Subscribe to the premium version of the Wire to learn more about the deal.

That’s it from me today. Let me also take this opportunity to wish you all a Happy Lunar Year!

If you have any questions, thoughts, or want to chat about tariffs or any other topic, please email me at rafael.c@pei.group.

Tomorrow, Nina Lindholm will be with you for the Europe edition of the Wire and Michael Schoeck will bring you the US edition.

Cheers,

Rafael

Read the full Wire commentary on PE Hub ...

Also of note (may require subscriptions)

Limited partners active in the North American market have as a whole increased their private equity allocations despite liquidity challenges. On average, investors grew allocations (as a percentage of total assets) to 11.1 percent in 2024, according to Buyouts data, up from 8 percent in 2021.

Infrastructure Investor explores how Trump's executive order on wind projects — the “Temporary Cessation and Immediate Review of Federal Wind Leasing and Permitting Practices,” which withdraws federal approval for onshore and offshore wind projects nationwide on federal lands — could affect the sector.

Sustainable lending debutant Colesco has raised €800 million for a mid-market European lending strategy with “a mission to unite capital and purpose,” the firm said on Tuesday. The firm, which was established in 2023, is seeking to raise between €1 billion and €1.5 billion, it told New Private Markets. At €800 million it has already become the largest private debt impact fund of its kind.

Manulife Investment Management has closed its Forest Climate Fund on $480.1 million and deployed about half of its capital in support of its forestland strategy that derives value primarily from carbon sequestration. (Agri Investor)

Swedish private equity firm EQT has shut down its US multifamily fund business and opted to not pursue further investments in the office and life sciences sectors. The changes have occurred as the firm has rebranded its real estate platform and doubled down on the industrial sector. (Private Equity Real Estate)

Liberty Mutual Investments, the investment arm of Liberty Mutual Group of Insurance Companies, will agree to buy a total of $5 billion of consumer loans from buy-now-pay-later fintech company Affirm. Terms weren’t disclosed. (Private Debt Investor)

Corinthia Global Management has secured commitments of close to $5 billion for its first direct lending fund, and it plans a launch within the first quarter of the year. (Private Debt Investor)

The majority of GPs plan to tap the secondaries market in 2025 and into next year with a rising number of managers acknowledging a need for unfunded commitments for their portfolio companies, according to PJT Partners’ FY 2024 Secondary Market Update. (Secondaries Investor)

Deals

They said it

“Anytime there's uncertainty and you're a dealmaker, you have to understand what kind of impact that uncertainty has on the way you were thinking about the deal. These deals don't just pop up and get resolved in two weeks.”

— Karl Roberts, managing director at Portage Point Partners on uncertainty in private equity dealmaking due to tariffs

Today's letter was prepared by Rafael Canton

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