Download 2017 Q1 Industry Investment Report - Private Equity Growth Capital

AMERICAN
INVESTMENT COUNCIL
2017-Q1 Private Equity Industry Investment Report
2
Table of Contents
Page
Executive Summary
3
Business Products & Services
5
Consumer Products & Services
7
Information Technology
9
Financial Services
11
Healthcare
13
Materials & Resources
15
Energy
17
PAGE 2
3
Executive Summary
In 2017-Q1 Business Products & Services (B2B), Healthcare, and Information Technology received over two thirds of US
private equity investment, with $35 billion, $29 billion, and $26 billion in investment, respectively. During this quarter investment in
five sectors fell (Consumer Products and Services (B2C), Information Technology, Financial Services, Materials & Resources,
Energy) while investment in Healthcare increased and investment in Business Products & Services (B2B) held steady.
The largest deal of Q1 was Team Health Holdings, a $6.1 billion public to private healthcare deal. Healthcare investment sharply
increased rising from $17 billion in Q4 2016 to $29 billion in Q1 2017. In fact, investments in the Healthcare sector were the
largest since Q4 2011, when volumes reached $29 billion.
Other Sectors saw continued declines in investment volumes. Information Technology investment fell from $28 billion in Q4 to
$26 billion in Q1, despite a slight uptick in the number of deals this quarter. Investment in Consumer Products and Services
(B2C) continued to fall for the second consecutive quarter, and Business Products & Services (B2B) experienced a small
decline in the number of deals while the amount of capital invested remained the same. These results contrast increases in
consumer and business confidence about future economic growth. Investment in Materials & Resources fell $3 billion from last
quarter falling to levels seen in 2015-Q1.
Lastly, investment in Energy declined in Q1 after a modest increase in investment in 2016-Q4. The number of Energy deals
continued to declined for the third consecutive quarter. Fundraising for the Energy sector was only $300 million, much lower than
previous quarters. Less fundraising could be a reflection of the uncertainty about the energy sector particularly as oil prices
continue to fluctuate.
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4
2017 Q1 Industry Investment Totals
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5
Business Products & Services (B2B) Deals
Company
Date
Top Deals 2017-Q1
Investment Value (Bil)
Financial Sponsor
Alecta
02/22/2017
$1.70
The Blackstone Group
Ballantyne Corporate Park
03/01/2017
$1.20
Northwood Investors
ModSpace
03/06/2017
$0.73
Undisclosed Investors
PAGE 5
Source: PitchBook
6
Business Products & Services Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital
and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2016 and 2017 medians are derived from samples with
less than 20 deals. TVPI is as of March 2017.
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7
Consumer Products & Services (B2C) Deals
Company
Date
Top Deals 2017-Q1
Investment Value (Bil)
Financial Sponsor
Apollo Global Mangement, Najafi Companies,
Vistria Group
Apollo Education Group
02/01/2017
$1.14
Affinity Gaming
01/31/2017
$0.58
Z Capital Group
Blue Nile
02/17/2017
$0.50
Adama Partners, Bain Capital, Bow Street
PAGE 7
Source: PitchBook
8
Consumer Products & Services Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital
and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is derived from samples with less than 20
deals. TVPI is as of March 2017.
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9
Information Technology Deals
Company
Date
Top Deals 2017-Q1
Investment Value (Bil)
Financial Sponsor
Infor
02/21/2017
$2.50
Koch Equity Development
Optiv Security
02/01/2017
$2.00
Kohlberg Kravis & Roberts
LANDESK Software
01/03/2017
$1.10
Clearlake Capital Group, Heat Software
PAGE 9
Source: PitchBook
10
Information Technology Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital
and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is derived from samples with less than 20
deals. TVPI is as of March 2017.
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11
Financial Services Deals
Company
Date
Top Deals 2017-Q1
Investment Value (Bil)
Financial Sponsor
NFP
02/17/2017
$0.75
HPS Investment Partners
Alarm Funding Associates
03/07/2017
$0.20
Riverside Partners
Sunlight Financial
02/22/2017
$0.13
Route 66 Ventures
PAGE 11
Source: PitchBook
12
Financial Services Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed
capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. 2009, 2011, 2012, 2013, 2015, 2016 and 2017
medians are based on samples with less than 20 deals. TVPI is as of March 2017.
PAGE 12
13
Healthcare Deals
Company
Date
Top Deals 2017-Q1
Investment Value (Bil)
Financial Sponsor
Public Sector Pension Investment Board, The
Blackstone Group, et al*
Team Health Holdings
02/06/2017
$6.10
DeVilbiss Healthcare
01/03/2017
$0.80
Clayton, Dubilier & Rice
Mallinckrodt (Nuclear imaging unit)
01/27/2017
$0.69
CapVest Partners, Curium
*Caisse de dépôt et placement du Québec, National Pension Service
PAGE 13
Source: PitchBook
14
Healthcare Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed
capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is based on samples with
less than 20 deals. TVPI is as of March 2017.
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15
Materials & Resources Deals
Company
Date
Top Deals 2017-Q1
Investment Value (Bil)
Financial Sponsor
Fortis Minerals
03/31/2017
$0.30
EnCap Investments
Essentra Porous Technologies
03/06/2017
$0.27
Babson Capital Management, Filtration Group,
Madison Industries
American Gilsonite Company
01/03/2017
$0.27
Undisclosed Investors
PAGE 15
Source: PitchBook
16
Materials & Resources Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed
capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. 2002, 2003, 2008, 2010, 2011, 2012, 2014,
2015, 2016 and 2017 medians are based on samples with less than 20 deals. TVPI is as of March 2017.
PAGE 16
17
Energy Deals
Top Deals 2017-Q1
Company
Date
Investment Value (Bil)
Financial Sponsor
Anadarko Petroleum
03/01/2017
$2.30
The Blackstone Group, Sanchez Energy
Corporation
Cricket Valley Energy Center
01/24/2017
$1.60
Advanced Power, Bechtel, BlackRock, et al*
SM Energy (Non-Operated Eagle Ford
Assets
03/13/2017
$0.80
EnCap Investments, Kohlberg Kravis &
Roberts, Riverstone Holdings, Venado Oil &
Gas
*Development Bank of Japan, Jera Co., Marubeni Power, Nonghyup Financial Group, Teachers Insurance and Annuity Association of America
PAGE 17
Source: PitchBook
18
Energy Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed
capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is based on samples with
less than 20 deals. TVPI is as of March 2017.
PAGE 18
19
Energy Fundraising
PAGE 19
Source: PitchBook
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