Displaying items by tag: private equity

Family offices are increasingly pivoting away from traditional investments and embracing alternative assets such as private equity, real estate, and venture capital. According to J.P. Morgan’s Global Family Office Report, nearly half of family office portfolios are now in private markets, reflecting their long-term horizons and ability to capitalize on illiquidity premiums. 

This shift allows for higher potential returns and smoother valuation changes compared to the volatility of public stocks. Many family offices also leverage their entrepreneurial roots for direct investments, contributing expertise and networks to private companies. 

Beyond diversification, these offices adopt goal-based strategies tailored to multigenerational needs, ensuring alignment with unique family objectives. 

Finsum: As they navigate evolving trends like generative AI and private market rebalancing, family offices continue to balance innovation with prudent risk management.

Capitol Meridian Partners, a defense investment firm established by former Carlyle Group executives, is ramping up efforts to capitalize on private equity's increasing influence in advancing U.S. defense technologies. 

The firm recently brought on Michael Puopolo, with experience at Blackstone and Carlyle’s aerospace and defense team, as managing director, alongside Curtis Uehlein, a former leader of multiple Carlyle-backed companies, as an operating executive. 

Having raised over $1 billion in its debut fundraising effort this year, Capitol Meridian is directing funds toward aerospace, defense, and government technology sectors. Notable projects include Parry Labs, which develops drone operating systems, and LMI, which supports the Department of Defense in transforming extensive data resources into actionable insights. 

Finsum: There is probably little doubt that a new administration will be more favourable to this type of private equity investments. 

BlackRock has announced a $12 billion acquisition of HPS Investment Partners, a private credit firm led by former Goldman Sachs and JPMorgan executives. The deal highlights BlackRock’s push into private credit, a rapidly expanding $1.6 trillion market that has grown as banks retreat from leveraged lending. 

CEO Larry Fink emphasized the blending of public and private markets as a core feature of modern investing. The move aligns with BlackRock’s broader strategy to deepen its presence in alternative assets, following acquisitions of Preqin and Global Infrastructure Partners earlier this year. 

While some industry leaders, including JPMorgan’s Jamie Dimon, have raised concerns about risks in private credit, BlackRock sees significant opportunities for growth. 

Finsum: This acquisition could boost BlackRock’s effort to position itself as a leader in alternative asset management.

As investors brace for the effects of Donald Trump's second term, Scott Sperling, Co-CEO of Thomas H. Lee Partners, offers a fresh outlook on the private equity scene. Mark Rowan, CEO of Apollo Global Management, hints at pursuing strategic acquisitions to bolster the firm's growth, while maintaining a strong focus on its existing operations. 

Sperling foresees an uptick in economic expansion and reduced operational costs under the new administration, largely due to regulatory reforms. He reflects on the past few years, noting that stringent regulations have made deals like mergers and acquisitions more complex and costly.

 Sperling also highlights the recent pressure on major tech companies, as government scrutiny and antitrust actions could stifle innovation in key sectors. Nonetheless, he remains hopeful that private equity will thrive, despite the challenges posed by shifting political dynamics

Finsum: We anticipate both regulatory and policy changes to be friendlier to P/E in the new administration. 

Private equity's growing control of rental housing has sparked concern as rents continue to rise, prompting calls for scrutiny from lawmakers. Senator Elizabeth Warren, joined by three colleagues, recently questioned KKR on how its recent $2.1 billion investment in rental units across eight states will impact long-term tenants and rental rates. 

KKR asserts its investments provide high-quality housing, but critics argue these acquisitions contribute to rising costs and fewer homeownership opportunities for regular buyers.

A Harvard report shows that rents have surged far faster than household incomes, putting financial strain on tenants who are forced to limit spending on essentials. Vice President Kamala Harris and other leaders have also highlighted private equity’s role in pricing out individual buyers and impacting housing affordability. 

Finsum: This type of regulation will obviously depend on the election results but there is little doubt that the Harris administration will make large changes to housing.