When ranked by the number of data room requests over the past three months, the most striking aspect of the top 10 investable fundraisings on Palico is sheer strategic diversity. Everything from Middle East buyouts to structured equity and debt in the U.S. and Europe is represented, demonstrating just how far from “plain vanilla” private equity has moved in recent years.
|Private Equity Covers Everything Under the Sun|
Although private equity investment in its early days was largely confined to the U.S., and focused on either generalist leveraged buyouts or venture capital, today it embraces every investment strategy and region. Private equity is not really an asset class, but a style of investing. The common thread is an activist, long-term approach to investment – in any asset type.
|Palico’s ‘Next Generation’ Private Equity Investment Opportunities|
Palico’s most popular fundraisings focus on what we call ‘next generation’ strategies. All mark a departure, sometimes radical, from the traditional strategies of buyout and venture capital. Top ranked Seed Equity Venture is affiliated with similarly named Seed Equity Ventures, an online VC investment banking platform, from which it plans to cherry pick high quality investment ideas. Many managers and investors are looking for new types of interlocking relationships that can give them an edge when sourcing or securing investments. Third ranked 500 Startups IV is a breed of VC investment vehicle that’s only blossomed in the past five years, seed accelerators. In an entrepreneur’s run-up to a first formal investment pitch, seed accelerators offer mentorship and several months of boot camp-like training in all aspects of running a startup. Second ranked Phoenix France Investissement takes an idea, pioneered by the likes of Apollo in the U.S., and gives it a new accent – focusing on turnarounds in the French market. French private equity in general has seen a startling uptick in investor interest since the election of European Union champion Emmanuel Macron as French president on May 7.
|What Seems New, Often Isn’t|
Fourth ranked fundraising VSS Structured Equity III, though only its sponsor’s third iteration of the increasingly popular strategy of investing in companies through debt and a range of hybrid equity instruments (the aim: asset ownership at relatively low cash flow multiples), is actually building on investment plays that go back to VSS’ founding in 1987. Those strategies were formerly employed in its more traditional private equity funds.
|The Popularity of Africa and the Middle East|
Though Africa and the Middle East account for a small percentage of private equity’s assets under management, these regions are increasingly popular; fifth ranked Acorn SME II, which specializes in Sub-Saharan Africa, and sixth ranked SPE African Industrialization, investing in Africa and the Middle East, are evidence. Investors who favor Africa, gravitate to the continent’s relatively attractive pricing and favorable long-term economic forecasts.
|Blazing New Territory|
If there is any doubt that private equity is a trailblazer of new investment realms, look no further than Doventi Capital II and Balmoral Wood Commercial Advocate, Palico’s seventh and eighth most popular fundraisings over the past three months. Doventi is one of a growing number of private equity firms investing in the newly legal cannabis industry in the U.S. Balmoral Wood is pioneering litigation finance, or third-party funding of lawsuits in exchange for a portion of any payout. Such funds have been supported by the recent lifting of prohibitions on third party funding in a number of jurisdictions.
|Healthcare and Real Assets|
RDCP Healthcare Opportunities II, a niche vehicle focused exclusively on the U.K. healthcare industry, and TIR Europe Forestry, a fund that buys stands of timber throughout the world, round off Palico’s most popular fundraisings, placing ninth and tenth. They reinforce the notion that as private equity diversifies globally, it becomes increasingly specialized.
|Palico, the First Place to Go for Primaries, Secondaries, Co-Investments|
Private equity encompasses a much broader range of investment strategies and regions than it did just five years ago. Mainstream or more specialized fundraisings, secondaries and co-investments – anywhere in the world – are easy to find using Palico’s online marketplace. Palico cuts down on inefficiency, leaving LPs and GPs more time to discover, analyze and invest in the best opportunities.