PE test drives the blockchain;  High risks persist in the consumer consumer sector

PE test drives the blockchain; High risks persist in the consumer consumer sector

S&P Global Market Intelligence presents our top picks for global private equity news stories and more throughout the week.

Blockchain technology increasingly looks like the key that could unlock a massive new market for private equity: the global super-rich, a group that holds about $80 trillion in investable capital, according to one oft-cited estimate by the chief of Blackstone Inc. Jonathan Gray.

became KKR & Co. Inc. In September, one of the newest and largest private equity firms to tokenize a portion of one of its funds on the blockchain. Each token represents a small portion of an equity stake in the fund, which means individual investors can purchase at a fraction of the typical ticket size.

Tokens offer another major advantage to retail investors: liquidity. The capital invested in a private equity fund is usually restricted for several years, but anyone who owns a token portion of a KKR fund can trade their interest after a one-year closing period.

It is still early days in the transition of private equity to the blockchain, and there are a lot of technical and regulatory wrinkles to overcome. This is especially true if the goal is not just to open up private equity to wealthy individuals but to truly democratize the asset class by giving Main Street investors access to its money.

Read more about these obstacles.

Weekly Planner: Risky Bets in the Consumer Sector

Consumer discretion was the sector most exposed to investment risk in the third quarter, according to an S&P Global Market Intelligence analysis. The analysis ranked the sectors according to three risk criteria: corporate orientation, shortness of interest, and probability of default.

Risks affect company valuations, which may create buying opportunities in the sector for private equity.

The number of discretionary consumer sector firms that cut corporate guidance more than doubled to 34 in the third quarter compared to the second quarter.

Deals and fundraising

* Funds managed by affiliates of Apollo Global Management Inc. closed. The acquisition of Lumen Technologies Inc. Carrier’s current operations and related assets In a deal worth $7.5 billion. Separately, Apollo-managed funds bought approximately 5% of a minority stake in alternative asset manager Diameter Capital Partners LP.

* Funds advice from Apax Partners LLP has agreed to sell its largest stake in Boasso Global Inc. To KKR, which is investing through the KKR Global Infrastructure Investors Fund IV. The target company provides storage, maintenance, cleaning and transportation services to the ISO tank container market in Europe and North America.

* Thoma Bravo LP closed sale of Frontline Technologies Group LLC to Roper Technologies Inc. for about $3.73 billion in an all-cash deal. Frontline Education provides purpose-built management programs K-12 educated.

* KKR and Goldman Sachs Group Inc.’s Petershill Corporation have pledged with core commitments to Atwater Capital’s first fund. The total capital commitment of Atwater Capital I LP is now over $100 million.

Latest in the industry

* Bayer AG . has been sold Her professional work is in the field of environmental sciences for Cinven Ltd. for $2.6 billion. The acquired business offers solutions to control pests, diseases and weeds in non-agricultural areas.

* Kinderhook Industries LLC has closed the acquisition of Gulf Tanks Holdings Inc. from WillScot Mobile Mini Holdings Corp in a transaction valued at approximately $323 million.

* GBF Capital has completed the acquisition of an 80% stake in the Spanish company Lizama Demolitions, which specializes in demolishing, recycling and rehabilitating industrial soils.

* HgCapital LLP has made a majority investment in Trustquay, a Business services corporate software, marking exit Silver Fleet Capital Partners.

Focus on: Energy

* Funds managed by PAG closed the acquisition of First Solar Inc’s Japanese O&M platform.

* TPG led a $450 million financing round for Form Energy, a long-term energy storage company. Ltd. and the Canadian Pension Plan Investment Board.

* HProfessional Vehicle Shipping Infrastructure Company Loop Global Inc. has collected. $60 million, including $40 million in Series A-1 and $20 million in financing facilities. The first round of Series A-1 was co-led by Fifth Wall Climate and Agility Ventures, with participation from Keystone National Group LLC, which provided the financing facility.

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