The bankruptcy question Download PitchBook’s Report here. A looming question over the next several months is how many PE-backed companies will be forced into bankruptcy. The odds suggest an increase in PE-backed bankruptcies as cash flows begin to dry up in the short term. According to PitchBook’s Quantitative Perspectives, GFC-era data offers some clues on what…
Investors’ Response to COVID-19 As a result of a survey conducted by Preqin to investors in April 2020, 59% of investors said that the number of commitments they plan to make to alternatives in 2020 has “slightly” or “significantly” decreased. Investors are also reducing the amount of capital they intend to commit to alternatives; sixty…
The passing opportunity for direct lenders Companies that may have gone to the syndicated finance market are looking closely at more private alternatives. In Europe, a leveraged finance market which had effectively been on hold since the covid-19 outbreak emerged in March has been slowly waking up. But, as it does so, banks are beginning…
Socially distancing from high multiples Download PitchBook’s Report here. The median M&A multiple clocked in at 8.2x in Q1. That’s down from last year’s 9.8x median, according to PitchBook’s just-released North American M&A Report. One quarter does not a year make, but 2020 is probably an exception. The Q1 dip included two normal months, which won’t…
Retailers expected to file Chapter 11 in the coming weeks as loan bids drop between 46%-66% this year The retail sector, hit hard by the coronavirus economic shutdown, has seen a flurry Chapter 11-related activity in the last several weeks. Last week, 24 Hour Fitness hired a restructuring advisor, while JC Penny, forced to close…
How Crisis Have Affected North America-Focused Private Debt Fundraising? Private debt has ballooned in size in the decade since the 2008-2009 Global Financial Crisis (GFC), when regulatory changes forced banks to deleverage their balance sheets, and private debt funds emerged as alternative loan providers to fill the void. But the global economic shutdown triggered by…
The biggest are the biggest for a reason Nothing much is predictable these days, but don’t expect the fundraising pecking order to change anytime soon. “Do what you can, with what you’ve got, where you are.” The inspirational quote comes from an autobiography of Theodore Roosevelt and surely resonates with anyone forced into lockdown as…
Different problems for real assets With fear permeating the real estate market, real assets are once again coming into focus. An upcoming PitchBook analyst note provides a retrospective on 2008 and potential implications for the current situation. Cash management was difficult for LPs twelve years ago. Real assets funds aged between four and eight years,…
COVID-19 hits unitranche issuance in 1Q20 After growing for three straight quarters and hitting an all time record high in 4Q19, unitranche volume took a steep hit in 1Q20. Total U.S. unitranche issuance fell to US$11.5bn in 1Q20, down 35% from 4Q19’s record high of US$17.5bn. The “mega tranche” trend that exploded in 4Q19 at…
Private Debt Fundraising Tips the Scales into Europe in Q1 2020 Fundraising fell in the first quarter of 2020 and the balance among the regions where funds are focused has slightly changed. Private debt funds focused on North America typically dominate the fundraising market, but in Q1 the balance shifted somewhat. In Q1 2020 there…