David Bateman

#Hargreaves_Lansdown Hargreaves Lansdown backed the £5.4 billion bid for the FTSE 100 fund manager today from a private equity consortium, a deal that will end its time as a listed company. The Bristol-based finance firm has been listed in London since 2007. It said today that the final offer valued its shares at 1140p in cash and would include a 30p per share dividend for the financial year which ended on 30 June. Compared to the Hargreaves Lansdown share price before the approach was first made in April, the price is at a premium of over 54%. The consortium is made up of CVC, Nordic Capital and ADIA. Hargreaves Lansdown is named after its founders – Peter Hargreaves and Stephen Lansdown – who set it up as an investment tip sheet. It now runs a state-of-the-art trading platform from which clients can run their own portfolios and pensions. https://lnkd.in/dKpizupy

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This is exactly what we hear from the VCs that we back. In the UK, there is no shortage of capital for world-class founders. There is a shortage of world-class founders. We need to create the conditions where the very best founders choose the UK as the place to build their companies. If we do this, then the capital will follow. Strong-arming UK pension funds to invest in UK VC funds or, even worse, directly into UK companies, is not the answer. For a more detailed view on this, please see the white paper we published last year on the Mansion House initiative. https://lnkd.in/e86HSxrY

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Major Barloworld shareholder rejects R120 offer, demands R130! Silchester says consortium’s offer is undervalued. UK-based SILCHESTER INTERNATIONAL INVESTORS LLP, a major investor in JSE-listed Barloworld, does not believe the offer from the consortium that is proposing to buy out all the ordinary shares in the JSE-listed group is “compelling”. A firm offer by the consortium last week values Barloworld at R23 billion and comprises a cash offer of R120 per share that will not be reduced by the R3.10 per share dividend already declared by Barloworld on 22 November. However, Silchester director Tim Linehan said the firm is unwilling to tender its Barloworld shares unless the consortium offers at least R130 per share. Linehan said a full privatisation of Barloworld is unlikely to succeed without the support of the group’s primary shareholders, including Silchester. Silchester owns 33 531 795 ordinary shares in Barloworld, which represents 17.7% of Barloworld’s issued share capital. The consortium comprises Entsha and Gulf Falcon Holding Limited, a wholly-owned subsidiary of the Zahid Group, a multidisciplinary conglomerate headquartered in Saudi Arabia and an effective 18.9% shareholder in Barloworld. Entsha is a newly incorporated company that is ultimately owned by The Katlego Le Masego Trust, an inter vivos trust established for the benefit of Barloworld CEO Dominic Sewela and his family. The scheme of arrangement requires the support of 75% of eligible voters who participate in the meeting – in their own capacity or by proxy – for it to succeed. The holders of about 22.92% or 43 367 048 of Barloworld’s shares are not eligible to vote on the proposed transaction. These excluded shares are those held by the Zahid Group (35 834 624), Barloworld Foundation (6 578 121), Dominic Sewela (653 207) and Katkego Le Masego Trust (401 096). Lineham said Silchester intends to exercise all rights available to shareholders in South Africa to protect the financial interests of Silchester’s clients. https://lnkd.in/dfqbFvix

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Great webinar with FT Live on the Global M&A Outlook in the EMEA Region. There is a feel of the optimism in EMEA’s M&A landscape, with private equity leading the charge and valuations on the rise. Geopolitical certaintly, growth agenda, and interest rates certainly will provide confidence in the market, therefore, the future is looking really good. #wheredealsaremade #privateequity #mergers

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The British Business Bank produced a great report last week on the performance of UK VC funds (link in comments) over the last 20+ years. As with all reports like this, it's really important to dig into the detail and not just rely on the headlines. In particular, I was keen to compare the performance of the best UK funds to those in the US. While accepting the limitations of the data (all performance data on VC is based on a very low sample size), it's still interesting to see how the UK funds in the BBB report compare to the Cambridge Associates US VC benchmarks. As you can see from the chart below, the top quartile benchmark for UK funds exceeded the US funds for the period 2002-2007. But the sample size for UK funds in this period is particularly low (eg just five funds for the 2004/05 period). Since 2008, the top quartile UK funds have underperformed the US benchmark, and since 2010 are much closer to the US median return than the upper quartile. There are some outstanding founders and companies in the UK and some strong-performing VC funds. But the reality of VC is that performance is driven by a small number of outlier investments. Without these, it's almost impossible to deliver 3x net returns to LPs. For the UK to really become competitive with the US, we need to see more UK-based companies able to scale and exit at valuations in excess of $5bn. Unfortunately, there are no easy solutions to achieving this. We consistently hear from our VC managers that there is no shortage of capital for the best UK companies. Where there is a shortage is in the number of world-class founders looking to build in the UK. Get this right and the capital (and returns) will follow.

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Interesting article: UK trades at a discount to US Election result has given certainty There is very low anti-monopoly concern Activity seems to be for relatively small companies being sold to foreign buyers My thoughts: Headline pitches this as good news - it’s not. We trade at a discount because growth potential is seen as limited. Companies are being bought by foreign interests before they have the opportunity to grow domestically. Deals are being done now because there is a “Labour discount” - everyone sees that Labour will not get another term so they buy now cheap and then trade out at a premium after the next election. LSE in underperforming - this is worrying.

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Excellent role modelling

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"Diverse PE & VC firms invest in a different universe of deals" My own experience in investment management shows that the different views on deals is one fo the key success factors! 🏆 Working together in gender diverse teams or with people of different backgrounds is so inspiring and value generating and, in addition, provides better performance! It is so important for investors and the teams themselves to have more equal opportunities on all levels of an investment firm from junior to senior positions. 🚀 More information in our emma Ventures' post below:

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Interesting thoughts from Houlihan on Direct PE (and the maturation of the market around independent sponsors) - "global volume (will) rise from $6 billion in 2019 to an estimated $50 billion this year, with annual deal numbers tripling over that period. We’ll see over 780 transactions this year... Directs have the promise to account for half of all annual capital raised for private equity in 10–15 years." #privateequity #independentsponsors

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A masterclass in private markets. A guest who has seen it all joined the latest Alt Goes Mainstream podcast. We welcomed HgT Chairman of the Board Jim Strang to the show and school was in session. Jim is a deeply experienced private equity professional who has been part of the industry as a GP, LP, investor, consultant, and now a teacher, board member, and advisor to a number of firms, including most recently as MD & Chairman EMEA Hamilton Lane and now as an advisor to CVC Capital Partners, Bain & Company, Pictet Group Alternative Advisors. Jim and I had a fascinating conversation about the evolution of private markets and what the future holds for large and small funds alike, as well as LPs. We discussed: * The step function changes that take private markets from $15T to $30T of AUM. * Why traditional asset managers may struggle to replicate the capabilities of alternative asset managers in private markets. * The importance of partnerships having a clear ambition and alignment if they want to build a scaled platform. * The challenges that managers in the middle face as large platforms and specialist managers are the differentiated firms in the eyes of LPs. * Why GPs need to find innovative solutions to address the needs of different types of investors. * Why building a strong brand is crucial to success in the wealth channel. Thanks Jim for sharing your wisdom and experience on private markets. We also welcome our new sponsor to Alt Goes Mainstream. We are thrilled to announce Ultimus Fund Solutions as podcast sponsor. This episode is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. https://lnkd.in/eJ_enGzQ

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There has been lots written about the impact of the budget, and some names are dominating the headlines. At the smaller end of the market where YFM Equity Partners invests we can already see Entrepreneurs and Business Leaders adapting to the new normal, and most positively where there will be opportunities to grow faster. One of the things we did not expect to see so quickly is a surge in Entrepreneurs looking to do some sort of ownership change transaction, The Business Magazine - South West & West Midlands / The Business Magazine - South East covers the 300% increase in enquiries below. These enquiries are Management Teams looking to buy the businesses they run from their owners, or owners looking to de-risk themselves with some cash out now and support from a Private Equity investor.

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It was great to get the investment in Stacatruc Limited completed. The first of many to come at YFM Equity Partners from Matt Gordon-Smith, with huge support from Callum Long. It took us longer to convince Matt Gordon-Smith to come and join us than it did for him to complete his first investment with us. Stacatruc is the 4th investment in the last 5 months - with another 6 in diligence across the business. We have a big team now though so plenty of capacity across all of our offices to talk about new opportunities. We can invest between £3m and £15m of equity. Either to fund a Change of Ownership when a business has £1m+ profit (MBO's, partial cash outs, carve outs etc), or Growth Capital to go faster when a business has £1m+ Revenue or ARR.

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Another wild day. 🙃😉🙃😉 4 new opportunities brought to our Operator Network cohort of PE, VC and Family Office clients. One is particularly interesting on a number of levels but largely because it’s a carve out of a £1bn+ Family Office portfolio…. £1.5m revenue D2C with 60% GMargin. Exceptional client list of MRR subscribers. Another opportunity involved an eco/retrofit business who have just done £1.8m revenue yr1 and growing to £8m yr2 with some cashflow finance required. There’s a £20m rev, £3m EBITDA specialist travel company raising £3m… Our vast community of Chairs and Non-Executives are plugged in to the SME deal-flow eco system. And guess what - these are largely completely “off-market”. Find out more at https://lnkd.in/eha-9Zxq #DealDirect #Virtualnonexecs

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Recent M&A market performance is showing significant signs of recovery from the lows of H2 2023, with the growth in PE and PE-backed deals leading the charge.

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If anyone would like hear my thoughts on stressed and distressed acquisitions please book your place on the link below or give Lizzy Tindall a shout

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Excited for tomorrow's "Meet the Manager" webinar! If you're an investor interested in private equity secondaries, this is a must-attend event. Register now: https://lnkd.in/gRSwEnMy 👈 *For professional investors only. #privatequity #secondaries #dotinvesting #webinar

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Anoop - I agree with you - preparation is key to getting a #deal done and if the preparation focusses on data then that definitely helps buyers. #PrivateEquity and businesses they back are particularly keen to see the data supporting the growth story for the business. CP Deals works with businesses, frequently alongside Anoop and his team, to find the right #buyers and #investors and we know that having great systems in place is an important factor in a successful deal.

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To achieve outsized returns in a maturing and increasingly crowded private markets space, investors should start leveraging all dimensions of diversification when building their portfolios! That comes with building the right teams to unlock differentiated sources of dealflow 🔔

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This post (image below) highlights the positive track record of UK managed VC funds in delivering good returns to investors. According to the British Private Equity & Venture Capital Association (BVCA) Performance Measurement Survey, in collaboration with PwC, UK managed VC funds have collectively achieved an impressive internal rate of return (IRR) of 11.2% per annum. This data underscores the potential for solid returns for investors engaging in these funds. Thank you to my ex-colleagues at the BVCA for compiling these amazing statistics - the full report can be seen here: https://lnkd.in/eF2RRKrP 👏 👏 👏

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