• Home
  •  
    Regions
    • Europe
    • UK & Ireland
    • DACH
    • Nordic
    • France
    • Southern Europe
    • Benelux
    • CEE
    • Asia
  •  
    Deals
    • Buyouts
    • Venture
    • Exits
    • Refinancings
    • Build-up
    • Turnaround
    • Secondaries
    • Advanced deal search
  •  
    Funds
    • Buyout
    • Venture
    • Mezzanine
    • Debt
    • Funds-of-funds
    • Secondaries
    • Fundraising pipelines
    • Advanced funds search
  •  
    GPs & LPs
    • GP profiles
    • LP profiles
    • GP news
    • LP news
    • Sponsors search
    • LPs search
  •  
    Secondaries
    • Deals
    • Funds
    • News
    • Analysis
  •  
    People
    • People moves
    • Analysis
    • In Profile
    • Q&A
    • Videos
    • Comment
  •  
    Analysis
    • In Profile
    • Fundraising
    • Q&A
    • Comment
    • Videos
    • Podcast
    • Reports
    • Data Snapshots
  •  
    Unquote Data
    • Deals search
    • Exits search
    • Funds search
    • Sponsors search
    • Advisers search
    • LPs search
    • League tables
    • Reports
  • Sign in
  • Sign in
    • You are currently accessing unquote.com via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0)203 741 1137

      Email: Georgina.Lawson@acuris.com

      • Sign in
     
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
  • Follow us
    • Twitter
    • LinkedIn
  • Free Trial
  • Subscribe
Unquote
Unquote
  • Home
  • Regions
  • Deals
  • Funds
  • GPs & LPs
  • Secondaries
  • People
  • Analysis
  • Unquote Data
      • Deals search
      • Exits search
      • Funds search
      • Sponsors search
      • Advisers search
      • LPs search
      • League tables
      • Reports
  • You are currently accessing unquote.com via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0)203 741 1137

    Email: Georgina.Lawson@acuris.com

    • Sign in
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
UNQUOTE
  • GPs

Many-headed Hydra: Private markets manager consolidation rears its head

Many-headed Hydra: Private markets manager consolidation rears its head
  • Rachel Lewis, with analytics by Jonathan Klonowski
  • 26 June 2023
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Send to  

The mythical beast of Greek legend, Hydra, was a gigantic serpentine water monster with nine or more heads, one of which was immortal. In some versions of the legend, whenever one was cut off, it would grow two more.

General partners (GPs) might not be serpentine monsters, but one contemporary trend evokes the ancient myth. GPs that have historically focused on one investment strategy, whether it be private equity (PE) or fixed income, are at the forefront of a new wave of strategic M&A among multi-strategy asset managers.

BlackRock's recent acquisition of Kreos Capital, a London-based credit shop for high-growth companies, is a case in point, with the buyer saying it "provides clients with a diverse range of private markets products and solutions."

Meanwhile, Brookfield Asset Management bought the PE secondaries unit of DWS Group, the asset management arm of Deutsche Bank, earlier this year. Private credit groups Arcmont and Alcentra were bought by Nuveen and Franklin Templeton respectively.

Selection of related European deals announced since Jan 22

Filing/Announcement Date Target Acquiror
08-Jun-23 Kreos Capital Management (UK) Ltd BlackRock Inc
27-Oct-22 Arcmont Asset Management Ltd (Con%) Nuveen Investments Inc
23-Aug-22 Access Capital Partners (24.5%) Alantra Partners SA
16-May-22 Sofinnova Partners SAS (Min%) Apollo Global Management Inc
09-Mar-22 17Capital LLP (Maj%) Oaktree Capital Management LP

Golden sword

Despite the trend for multiple heads, fundraising continues to be a weak spot in the sponsor landscape. Thanks to the denominator effect, limited partners (LPs) are squeezed for commitments, flocking to the combination mix of specialist strategies and well-established GPs.

A total of 31 funds targeting Europe have closed so far this year, according to Unquote Data, a 27.9% fall versus the equivalent period last year.

"Clients are choosing fewer managers, there are bigger bites of the pie going to fewer groups, which is creating scale among a smaller handle of institutions," said one large multi-asset manager.

However, the new arm for Blackrock does help to fill some of the market void for startups seeking non-dilutive capital solutions that was left after the collapse of Silicon Valley Bank.

Regeneration

The trend is unlikely to affect consolidation among the private equity space itself, despite many in the mid-and large-cap space struggling to raise capital. "It's tough to consolidate thousands of private equity firms," said the co-president of one large GP.

"Through every boom and bust, those who don't have enduring performance will go away or shrink down to normal size."

Value-creation is going to be "vital" for those who want to escape the bust, but to achieve that "you need access to capital and operational complexity, which you can only do if you're driving multi-asset solutions," said the global head of private equity at a further asset manager.

Brookfield is predicting further consolidation, saying that like "virtually all sectors" there are up to ten major players in the world, in a letter published alongside its Q1 results. It, alongside groups like Apollo Global Management, Franklin Templeton, Oaktree and other large managers are expected to be at the forefront of that wave.

In the Heracles legend, not only was Hydra hard to kill. but its poisonous blood could be harvested for further challenges. GPs who are too small to develop a true multi-strategy approach might still want to dip their arrows into Hydra's neck as they move away from just one approach.

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Send to  
  • Topics
  • GPs
  • Financials
  • Investments
  • Apollo Investment Corporation
  • Oaktree Capital
  • BlackRock
  • Alantra
  • Exclusive

More on GPs

IPO offers CVC chance to become multi-asset consolidator
IPO offers CVC chance to become multi-asset consolidator

Potential IPO also offers monetisation solution for founders and GP stakes investor Blue Owl

  • GPs
  • 25 August 2023
VC Profile: Possible Ventures lines up frontier tech deals halfway through fresh EUR 60m fundraise
VC Profile: Possible Ventures lines up frontier tech deals halfway through fresh EUR 60m fundraise

Germany-based pre-seed investor is set to hold a first close for its third fund in mid-September

  • GPs
  • 25 August 2023
GP Profile: Apheon builds on family roots, mulls exits and reinvestment opportunities
GP Profile: Apheon builds on family roots, mulls exits and reinvestment opportunities

Belgian GP, formerly known as Ergon, to continue to target family- and entrepreneur-owned European businesses

  • GPs
  • 18 August 2023
Kudu to step up boutique GP stake deals in Europe
Kudu to step up boutique GP stake deals in Europe

MassMutual-backed investor aims to add more infrastructure and specialised equity GPs to its portfolio

  • GPs
  • 09 August 2023

Latest News

Partners Group to release IMs for Civica sale in mid-September
  • Exits
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme

Sponsor acquired the public software group in July 2017 via the same-year vintage Partners Group Global Value 2017

  • 04 September 2023
BHM Group builds on PE strategy, eyes European medtech and renewable energy acquisitions
  • Investments
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme

Czech Republic-headquartered family office is targeting DACH and CEE region deals

  • 01 September 2023
Redalpine expands leadership team amid CHF 1bn-plus fundraise
  • Venture
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme

Ex-Rocket Internet leader Bettina Curtze joins Swiss VC firm as partner and CFO

  • 31 August 2023
Change Ventures aims to hold final close for EUR 20m third fund by mid-2024
  • Funds
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme

Estonia-registered VC could bolster LP base with fresh capital from funds-of-funds or pension funds

  • 31 August 2023
Back to Top
  • About Unquote
  • Advertise
  • Contacts
  • About Acuris
  • Terms of Use
  • Privacy Policy
  • Group Disclaimer
  • Twitter
  • LinkedIn

© Merger Market

© Mergermarket Limited, 10 Queen Street Place, London EC4R 1BE - Company registration number 03879547

Digital publisher of the year 2010 & 2013

Digital publisher of the year 2010 & 2013