Sanjay Gupta

#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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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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The dynamics within private equity are shifting, with investment and operating teams increasingly working together to maximise portfolio value. At Fortius Partners, Simon and I anticipated this evolution when we merged Citius and Altius in early 2023. We built a core team of independent operating partners to support investment teams and operating leaders in delivering tangible results. In our first year, we led 14 transformation engagements; this year, that number has more than doubled, with 31 successfully completed. With expertise across sales transformation, pricing strategy, and post-merger integration, Fortius Partners is well-positioned to help investment teams and operating partners drive growth and operational excellence within their portfolios. #PrivateEquity, #DealFlow, #SalesTransformation, #PricingStrategy, #PostMergerIntegration, #GrowthStrategy, #TransformationExcellence, #PortfolioPerformance, #InvestmentStrategies, Fortius Partners Simon Andreas Hofmann #OperatingPartner

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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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Last Wednesday at SuperReturn Middle East Namit Chugh and I had a freewheeling chat on the role Middle Eastern capital could play in emerging markets. Having lived and worked in the UAE for half a decade as a fund manager and pitched to several local LPs across two fundraising roadshows my key takeaway is that Middle Eastern LPs are conservative - they believe in capital preservation even when allocating to alternative assets class. Which is why ME allocations have typically found their way to the developed US and EU markets. One also notices that ME investments into new age businesses in India typically comprise large cheques (~USD100Mn) in late stage (Series D, E, F) "startups" ostensibly in the belief that later stage investments were safer bets. The ME is gradually turning the spotlight inwards to provide an impetus to its non-oil related fledgling private sector (eg KSA, Oman) and to emerging economies in the MENA region. But, I don't see the ME countries venturing into South Asia and SE Asia. Isn't this a missed opportunity given that India and some SE Asian countries like Vietnam, Indonesia, Malaysia, Philippines etc are together going to drive a major proportion of global GDP growth (as per the World Bank)? Hopefully, ME capital will wizen up and increase its India exposure but not only with few large late-stage cheques (which are also necessary for the growth of the ecosystem) but with several, and frequent, small and medium sized investments, across funds and startups, across stages. This will enable them to get to know the Indian market better and create a form of reciprocal symbiosis where their capital will benefit Indian startups and they could get dual returns in the form of pecuniary returns as well as the ability to tap India's R&D and innovation for the ME markets.

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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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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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UPS and Northvolt show how private equity does accounting differently (shall we say)… 🤔 The Financial Times certainly has a valid point in its recent critical coverage of the private equity industry, highlighting the growing disconnect between public and private markets in terms of accounting practices. "UPS can only look on with wonder at Goldman Sachs. On Friday, the U.S. Securities and Exchange Commission announced it had fined the shipping company $45mn for improperly carrying an acquired company at a value hundreds of millions of dollars above what management knew it was worth. As such, the audited financial statements that its public shareholders rely on were deemed inaccurate and misleading. ⚠️ The rules are different in private equity. The Financial Times reported over the weekend that Goldman Sachs would write down its $900mn investment in troubled battery maker Northvolt to zero. Earlier this year, Goldman had told the limited partners in its private funds that its investment in Northvolt was worth more than four times what it had paid for it, and that it expected its value to reach six times by 2025. ‼️ It may be that Northvolt took a serious turn for the worse in recent months. But accounting in private capital has increasingly come under fire since the era of zero interest rates ended in 2022 and speculative companies were suddenly subjected to a harsher light. Listed companies that have retail ownership bases are mandated into regular financial reporting, according to stringent rules. Supposedly 'accredited' wealthy investors and institutions that participate in illiquid private markets only really know how their funds performed when — years later — it is time for them to get their cash back. Private equity and private debt groups insist that they rigorously engage outsiders to perform portfolio valuations. And there are all sorts of art 🖼️ and science 🔬 applied and even smoothing techniques may not be such a bad thing in moments of public market volatility. Still, the Northvolt experience is an embarrassing moment for the champions of private markets whose scale, influence and intrinsic opacity only continue to grow." (+++Opinions are my own. Not investment advice. Do your own research.+++) #markets #investing #money #wealthmanagement #privatemarkets Tap the bell 🔔 to subscribe to my profile & you'll be notified when I post. 💸

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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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Gain.pro's research got featured in the Financial Times :) more about the current state of PE below!

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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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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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In the recently published 𝗔&𝗠 𝗔𝗰𝘁𝗶𝘃𝗶𝘀𝘁 𝗔𝗹𝗲𝗿𝘁 (𝗔𝗔𝗔) 𝟮𝟬𝟮𝟰 𝗜𝗻𝘁𝗲𝗿𝗶𝗺 𝗢𝘂𝘁𝗹𝗼𝗼𝗸, the team presents five key predictions for shareholder activist activity in Europe over the next year. 1. Increased M&A activity will be a key driver of shareholder activism; 2. There will be greater focus on public to private transactions; 3. Operational transformation will be an additional value-add for activists; 4. Internal vs external capital allocation decisions will come under greater scrutiny; 5. The desire for near term investment yield will slow the ESG momentum. Find out more in the latest Activist Alert: https://okt.to/A5fV7s #ActivistAlert #Activism #Europe

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The latest monthly report from Phenix Capital Group shows growth of more than 10% in both the number of infrastructure impact funds on its database and the amount of capital raised by them over the last year, writes Ian Lewis. #impactinvesting #infrastructure #realassets https://lnkd.in/ewzizs_U

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PE - Hedge Funds Hit by Lack of PE Exits (and one way that PE firms can boost exits) Financial Times: https://lnkd.in/edACss_X FYI - one way to get more PE exits is for the PE fund to have a domain expertise GTM and have deep knowledge on how to increase the Revenue Growth of portfolio companies which boosts cash, profits and margins. --- #pe #privateequity #business

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📣 We’ve got a big ESG_VC event planned for Tuesday next week – featuring the latest updates to our measurement framework, news of our 2025 benchmarking with the British Private Equity & Venture Capital Association (BVCA), and an introduction to our new platform partners… 📣 On the afternoon of Tuesday 26 November, we’ll be gathering 200+ VCs for the latest update on the ESG_VC Measurement Framework – from what it covers to how it informs industry-leading research, and how you can now work with our accredited data collection partners. This will be our first event delivered in partnership with our cohort of platform partners: Apiday, Novata, and PortF. I’m excited to share with our members how these partners can support a big step up in your ESG initiatives. Join us for a jam-packed event that will feature: 🟢 An update from Suzi Gillespie of the BVCA on how you can take part in our 2025 research – we analysed ESG performance in c.600 VC-backed companies in 2024 and we’re looking to deliver an even more ambitious piece of research next year… 🟢 Insights from Emily Havers of Fidelity International Strategic Ventures on the updates that have been made to the framework and what it means for our members, their portfolio companies, and the broader ecosystem. 🟢 Perspectives from Emily Matthews of Oxford Science Enterprises and Nina Foote of Volution on how the ESG_VC Measurement Framework has supported their work on ESG. 🟢 Presentations from our platform partners: Edouard Audi of Apiday, Conor O'Laoire’Laoire of Novata, and Alex Lu of PortF. It’s going to be a good one so do register. Link to sign up in the comments! #ESG_VC #sustainability #venturecapital

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