The stage is set for private investment to drive recovery

There are several reasons to be optimistic about 2021. Vaccines are starting to be made available and are expected to save lives, raising hopes that the US economy is poised to re-open next year. The US presidential election has largely been decided which has taken some uncertainty out of the markets. 

These positive developments have already helped stimulate the resurgence of private equity in the third quarter of 2020, when USD148 billion in transactions occurred that surpasses last year’s third quarter total by 10 percent, according to a new survey. READ MORE

Insights on the World of Private Equity - December 2020

Emerging companies have historically been backed by venture capital funds, but as Europe’s startup scene matures, involvement by more traditional private equity investors is growing, particularly in the tech, consumer, and digital health sectors. The number of PE investments in emerging companies has increased year on year, with investments in companies such as Wolt, Moonbug Entertainment, Zwift, Klarna, Epic Games, and Oatly demonstrating the range of opportunities available to PE sponsors in this space. While PE investors are increasingly familiar with VC deal dynamics, they are also pushing to align growth-deal terms more closely with traditional buyout concepts. READ MORE

Private Equity Collateralized Fund Obligations Weather Coronavirus-Driven Downturn

Private equity collateralized fund obligations (PE CFOs) rated by Fitch Ratings have so far weathered the economic downturn and market volatility caused by the coronavirus pandemic, with sector and strategy diversification proving to be the differentiating factors.

Distributions from underlying PE funds remained relatively stable for diversified transactions, driven by better performing sectors. Capital calls on PE CFOs increased as PE funds sought to support portfolio companies or enhance liquidity and, in some cases, take advantage of opportunistic investments. READ MORE

Private Equity Offers Survival Tactic to Fund Industry in Crisis

When Niklas Ringby spots a stock worth buying, he ignores decades of diversification advice that most investors live and die by. In the words of hedge fund legend Stanley Druckenmiller, he bets the ranch. The EQT AB money manager’s approach of wagering on just a handful of stocks may sound like excessive risk-taking to a generation of punters warned against chucking all their eggs in one basket, but it’s churning out bumper profits. The $1 billion fund he runs from Stockholm with Fredrik Atting for the private equity giant has gained 35% this year, while European stocks are down 5%, according to an investor letter. That’s on top of the 45% it returned last year. READ MORE

How the SPAC Boom Could Spill Over Into Private Equity

This year’s boom in special-purpose acquisition companies could make way for at least 20 private equity-backed companies to go public in 2021, according to PitchBook.  

It has been a banner year for SPACs: Over 200 launched in 2020, dwarfing the 52 raised in 2019. This year alone, SPACs have raised as much money as they did over the previous decade, as Institutional Investorpreviously reported.  READ MORE

2021 Projected to be Another Blockbuster Year for Biopharma VC

PitchBook has published its 2021 U.S. Venture Capital Outlook report. The report predicts venture capital (VC) activity and performance for next year.

One of the key projections is that for the second consecutive year, biotech and pharma VC deal activity will probably exceed $20 billion. They think this is being fueled by growing capital commitments from VC investors hoping to enter the biopharma space, as well as recycling of profits and liquidity from this year’s initial public offering (IPO) market. READ MORE

This VC introduced Palantir’s first business hire to its earliest engineer, then his business took off

You might not know of XYZ Venture Capital, a four-year-old, San Francisco-based seed-stage venture firm, but many veterans of Palantir are surely aware of it. XYZ says it has already backed 22 startups whose founders came out of the data analysis company, including, most notably, Anduril, Palmer Luckey’s defense tech startup. In fact, the founder of XYZ, Ross Fubini, says his firm wrote Anduril its first check. READ MORE

First-Day IPO Pops Leave Billions On The Table, Raise Questions About Pricing

While the recent IPOs of Airbnb, DoorDash and C3.ai have illustrated the heat in the public markets for tech stocks, they also raise questions about how initial public offerings are priced.

All three saw significant “pops” — jumps in stock price — in their first day of trading. While that may make those who were able to secure shares excited, it also can mean the companies themselves left hundreds of millions of dollars — or billions in the case of Airbnb and DoorDash — on the table. READ MORE

With Ample Dry Powder on the Sidelines, Private Equity Investors' Top Priority in 2021 is Deploying Capital

Looking to 2021, 88% of private equity (PE) investors indicate their most important objective is deploying capital, a nearly ten point increase from 79% in 2020, according to a recent survey of private equity investors conducted by Lincoln International.

Private equity investors remain focused on identifying acquisition targets—nine in ten (89%) investors expect to be more active in buying than selling portfolio companies in 2021, compared to eight in ten (82%) the previous year. READ MORE

PitchBook Publishes 2021 US Venture Capital Outlook Predicting Record Nontraditional Investor Participation

PitchBook, the premier data provider for the private and public equity markets, today released its 2021 US Venture Capital Outlook report, which details predictions for venture capital (VC) activity and performance in 2021. Following a tumultuous year and several macro headwinds, the VC industry is undergoing a period of transformation and innovation, which has only been accelerated by the coronavirus pandemic. READ MORE

From the startup to the enterprise: where cyber fits in the growth trajectory

Starting a new business by definition is risky. It’s why early on in Silicon Valley you heard that catchy, albeit completely ill-conceived motto of  ‘fail fast, fail often.’ 

But while entrepreneurs understand many aspects of the careful balance of risk versus reward – the successful ones anyway – consideration of the security of systems and data often comes later. It’s not ignored, mind you. But whether it’s a line item in the business plan presented to venture investors is another story. READ MORE

These are the Top Venture Capital Firms of 2020

One of the best performance measures of the venture capital firms is the Investment to Exit Ratio. A ratio of 1 means a VC is making one investment for every exit, or no growth. A ratio of above one would mean the VC is the net acquirer of portfolio companies, or a growth scenario. So, the higher the ratio, the better it is.

We have ranked the Venture Capital Firms on the basis of Investment to Exit Ratio only. Following are the top Venture Capital Firms of 2020: READ MORE