20 August 2020
Fireside chat on global private equity: challenges and opportunities
Euan Rellie, BDA Co-Founder and Senior Managing Director based in New York, recently joined a unique fireside chat with three global private equity firms and the largest & most active global PE legal practice.
- Euan Rellie, Co-Founder and Senior Managing Director, BDA Partners
- Duncan Enista, Partner, Kirkland & Ellis
- Andre Puong, Partner, Cathay Capital
- Joanne Yoo, Managing Director, DPI
- Bob Landis, Founding Partner (Origination), Riverside Company
- Moderated by Jordan Selleck, CEO & Co-Founder, 51 Labs
Here are some of the key takeaways. Check out the full video for more detailed insights.
- Global buyout transactions fell 60% from January to April and transaction volume is now trending around 1/3 of the five-year monthly average
- Uncertainty in the US is hampering deal flow relative to other markets
- Deals are getting done, but largely for add-ons and platforms known pre-COVID
- Earn-outs: Not seeing a significant uptick in earn-outs; however, Duncan is seeing them as a way to get sellers back to the table when the valuations weren’t what they had hoped for during the lockdown
- Hong Kong: The mood is bleak, according to Euan Rellie, Senior Managing Director at BDA. Firms are moving out and there’s a feeling that it’s quickly becoming less of the multinational hub that attracted people for decades. In the short term, tying Hong Kong closer to China might not be all bad. For example, Chinese companies which may have be reluctant to do IPOs in Western markets might favor listing in Hong Kong
- China: Doing cross-border deals with China is more difficult now. Today, you have competitive local brands that are going to eat your lunch if you’re not extremely aggressive and localized. You can’t use the playbook of 20 years ago
- Africa: Joanne Yoo, Managing Director at DPI, made it clear that Africa is not as connected to the rest of the world so the pandemic hit later and caused less damage. DPI’s deal activity is actually busier than before. Their portfolio companies have largely been deemed as essential businesses, and like many lower/mid-market company in Africa, they hold more inventory than other markets
- What impact will the upcoming US election have on their business and strategies, based on a scale of 1-5? Joanne 2, Bob 3, Andre 3, Duncan 2, Euan 2
Latest insights from BDA:
- Shifting sands: changes in trade and investment in an uncertain world
- China is cracking down, but Hong Kong’s economy is too precious to kill
- Fireside chat on global private equity: challenges and opportunities
- BDA’s Charlie Maynard on opportunities in the Asian M&A market
- “Let it go”: The search for painless carve-outs
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