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Vista talks opportunities in software sector; Blackstone bets on energy

Good morning, dealmakers! Aaron here to start the short week.

Today, we have fresh outlook pieces from Vista and Blackstone as well as news from the largest pension system in the country.

Software spotlight. Continuing with our outlook series, we have a software specific edition.

Vista Equity Partners president and COO David Breach shared some thoughts after an active year for the firm.

In 2022, Vista was involved in several of the largest enterprise software deals of both the year and the firm’s history. The firm bought Citrix, Avalara and KnowBe4 and sold Datto and Ping Identity.

Here’s an excerpt:

What will be the most important trends affecting your dealmaking in 2023?

We continue to believe investing in enterprise software remains one of the best uses of capital anywhere in the financial markets. Even against the backdrop of increased uncertainty, businesses are expected to increase their IT spending, indicating that software spend is less discretionary today than it was in prior cycles. These are mission-critical tools that are often one of the last services businesses look to “turn off,” which is illustrated by the resilient retention rates we continue to see across the space. We think the public markets will continue to offer attractive opportunities to acquire great companies at reasonable valuations.

You can read the whole story here.

Energy and environment. We also have a fresh Q&A outlook piece from Craig McGlashan over at our PE Hub Europe.

Juergen Pinker, senior managing director at Blackstone talks about the energy transition, including his firm’s strategic investment in Esdec, a provider of mounting systems for rooftop solar.

Here’s a snippet:

How has private equity adapted to the increased demand for sustainable investments in recent years?

The energy transition presents a huge opportunity for investors – flexible capital and the ability to deploy it at scale are essential to funding decarbonization, which is now top of mind for many businesses all over the globe.

2022’s legacy as the year of the energy crisis, combined with supply chain issues and the fragility it exposed, continues to act as a catalyst for further investment in low-carbon energy sources. The need for energy security means countries all over the world are looking to increase sustainable domestic energy production – which in turn creates investing opportunities.

You can read the whole story here.

Emerging managers. California Public Employees’ Retirement System is pledging $1 billion to TPG and GCM Grosvenor to back emerging and diverse managers. It is committing $500 million to each of the firms via TPG’s NEXT fund and Grosvenor’s Elevate strategy, writes Buyouts’ Chris Witkowsky.

According to Chris, some view the commitment as mostly a public relations strategy, a way for CalPERS to signal that it is committed to boosting diversity in the private equity world. This is because $1 billion, for a system that manages a total of about $453 billion in assets, seems minuscule and perhaps not significant. But $1 billion is still $1 billion, and especially for the diverse PE community, it’s at the very least a good first step.

You can read the whole story here.

That’s a wrap for me. Chris will be with you tomorrow, and MK Flynn will write the Wire on Thursday. Happy dealmaking!

Cheers,

Aaron

Read thefull wire commentaryon PE Hub …

Also of note (may require subscriptions)

Some sources viewed CalPERS $1 billion commitment to back emerging and diverse managers as mostly a public relations strategy, a way for the nation’s largest public pension system to signal that it is committed to boosting diversity in the private equity world. This is because $1 billion, for a system that manages a total of about $453 billion in assets, seems minuscule and perhaps not significant. But $1 billion is still $1 billion, and especially for the diverse PE community, it’s at the very least a good first step. (Buyouts)

Speaking of CalPERS, they have appointed Peter Cashion as managing investment director for sustainable investments. Cashion will join from the World Bank’s International Finance Corporation, where he has spent 27 years, most recently as global head of climate finance and chief investment officer in the IFC’s financial institutions group. (New Private Markets)

Bellevue Asset Management, which formed its secondaries unit in December, is in market with its debut offering, Secondaries Investor has learned. The firm is seeking between $200 million and $300 million for its inaugural secondaries vehicle Bellevue Global Private Equity Fund, according to a source familiar with the fundraise.

It is just over four years since Marguerite’s second flagship fund closed on €745 million, and last week the company announced that a pipeline of investments was in place for the company’s third fund now that the second one is fully invested. (Infrastructure Investor)

Wind is picking up in private equity: Lightrock and Verdane have made note-worthy deals in the ‘picks and shovels’ of the wind power generation sector. (New Private Markets)

"A year-long investigation by the National Association of Insurance Commissioners, a US regulatory group, has found that rating agencies can understate the risk of CFOs to insurers, which are among the vehicles’ main investors, according to people familiar with the matter." (Financial Times)

"Bain Capital co-chairman Steve Pagliuca is retiring after a 34-year career at the private-equity firm." (Wall Street Journal)

"Brookfield Asset Management is considering selling technology outsourcing firm Everise for about $1 billion amid interest from potential buyers, according to people familiar with the matter." (Bloomberg)

"Vikram Kapur, Bain & Company's Head of APAC Health & Life Sciences practice, discusses his outlook for healthcare private equity in 2023." (Bloomberg Video)

"Lawyers are seeking compensation of at least £150mn on behalf of thousands of mortgage borrowers who believe they have been unfairly charged high standard variable rates, after the loans were snapped up following the collapse of Northern Rock. ... US private equity group Cerberus was among the companies that snapped up portfolios of home loans from Northern Rock after it was nationalised in the 2008 financial crisis." (Financial Times)

"Greybull Stewardship, a private-equity firm that invests in small businesses across the U.S., has closed on $140 million across two funds." (WSJ Pro)

"Private-equity companies are taking a closer look at how their portfolio companies manage their cybersecurity, often before a deal is signed." (WSJ Pro)