Private equity investors are backing away from the mid-market space, says Adamantem’s Angus Stuart.
Private equity has been on a fundraising blitz in past years. But increasingly, funds are moving away from the mid-market domestic sector which invests in companies worth between $200 million and $300 million.
The group shares some back office functions including legal, compliance and investor relations with equities fund manager Melior Investment Management. That shift has also slowed deal activity. Mr Stuart said in the last five years, there had been between 50 and 70 deals a year, worth between $10 billion and $15 billion. But this year to date, there have been just 32 deals. Excluding Blackstone’s Crown buy-out, there’s been only $5 billion of investing.“The deal activity as people come to grips with all the dislocations going on has certainly slowed in the second half,” he says.
Specifically, he’s talking about cybersecurity threats, and meeting responsible investing benchmarks, including reporting against the Modern Slavery Act or mapping out a plan to net zero within 10 years, which Adamantem does for each of its portfolio companies.
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