Private equity dealmakers party in Europe

One thing to start: TikTok US will be valued at $14bn under President Donald Trump’s deal to force a split from the social media app’s Chinese parent, vice-president JD Vance said on Thursday. Oracle, private equity group Silver Lake and Abu Dhabi’s MGX will control roughly 45 per cent of TikTok US, the FT reports. ByteDance will own 19.9 per cent.

And a big event: Private capital’s leading lights are converging on London for the FT’s private capital summit next month. Join us on October 14 to hear from KKR’s co-head of European private equity Philipp Freise, Mubadala Capital chief executive Hani Barhoush, LGT managing partner Ivan Vercoutère and CDPQ managing director Sharon White. Attendance is limited, but DD readers can apply for a pass here.

In today’s newsletter: 

Dispatches from PE’s European shindigs

It’s shaping up to be a busy autumn in private capital. Dominant players such as Blackstone are lining up their biggest companies for IPOs and the pace of dealmaking is accelerating, say industry leaders.

In Europe, optimism is resurgent as private capital’s movers and shakers cavort at Germany’s Oktoberfest and a Parisian confab that’s always pencilled in as one of the industry’s big social events.

At the annual IPEM conference in Paris this week, dealmakers said their global investors were clamouring to deploy capital on the continent, following both the instability rumbling out of the US administration and European leaders’ announced reforms.

Philipp Freise, co-head of European private equity at US alternatives giant KKR, said some flows that would have gone to the US only a few months ago were now being reallocated to Europe. (He hastened to add that this did not mean the US was “less attractive . . . it’s just people diversifying more”.)

This year the firm has deployed a record sum in Europe — more than $20bn, in fact.

Over in Munich, dealmakers were kitted out with traditional Bavarian lederhosen and dirndls for the city’s Oktoberfest.

The event draws a large crowd from advisers and investors, who book tables in upscale tents for entertaining. Reservations are coveted and celebrities roam free.

The mood is festive thanks in part to the beer and schnapps, but the outlook for M&A in Germany is more mixed. Many declining companies are exploring sales of non-core assets while defence groups are seeing a surge of activity.

However, one large transaction did reach a conclusion: the FT revealed this week that the grid operator Tennet Germany was raising €9.5bn in a private placement.

While Europe’s top financiers have been soaking in the festivities, DD hears it’s teams in New York that have their heads down driving the much-heralded dealmaking boom.

The Big Tech duo filling a Musk-shaped hole in Trump’s life

Make hay while the sun shines. It’s an adage that Sam Altman and Mark Zuckerberg have clearly taken to heart.

They’ve been ingratiating themselves with Trump in the months since the US president’s spectacular blow-up with erstwhile “first buddy” Elon Musk.

Musk hasn’t been in Washington since May and it was only this week that he met Trump again, during the memorial service for conservative activist Charlie Kirk.

In the meantime, Zuckerberg and Altman have been to the White House about half a dozen times this year, according to the FT’s Joe Miller, Hannah Murphy and DD’s George Hammond.

On the face of it, it’s an improbable partnership given the OpenAI and Meta co-founders were both Democrat donors in the past and both companies have been repeatedly accused of political bias by prominent Republicans.

Trump last year threatened to jail Zuckerberg for life if he interfered with his presidential bid. In 2016, Altman wrote that Trump’s election victory “feels like the worst thing to happen in my life”.

But needs must: the pair both have to get close to the administration if they are to avoid red tape and achieve their artificial intelligence dreams.

Zuckerberg promoted Meta’s longtime Republican lobbyist Joel Kaplan to head of global affairs, and he’s drawn on Republican strategist Brian Baker to build relationships with White House chief of staff Susie Wiles and policy tsar Stephen Miller.

Altman, meanwhile, has gained a foothold in the White House with the help of conservative tech billionaire Larry Ellison.

It’s an approach that’s served both the administration and Zuckerberg and Altman.

The tech bosses have the support of the White House in their push to build AI tools and Trump gets to boast about the hundreds of billions of dollars they’re investing in the US.

Not everyone is convinced by the love-in. As one person close to the administration put it:

“If [California’s Democrat governor] Gavin Newsom is the next president, guess who’s going to be there next to Gavin saying ‘You’re the greatest thing since sliced bread’?”

Private equity’s busted IPO problem, squared

It’s a well-worn path for private equity: take a portfolio company promising big returns to the public. Then after the company’s stock tanks, go back to square one and take it private again. 

Scores of blue-chip private equity groups such as Permira, Silver Lake, EQT and General Atlantic have turned to the tactic in recent years after many PE-backed IPOs have received a lacklustre reception on public markets. 

PE firms have reprivatised companies they took public, including classifieds group Adevinta, sports and talent giant Endeavor Holdings and medical diagnostics company Synlab.

Now comes an even deeper extension of the trade.

Goldman Sachs’ Petershill Partners emerged as one of biggest buyers of minority equity stakes in other private equity partnerships, building a multibillion-dollar portfolio of stakes in PE groups such as Francisco Partners, General Catalyst, Clearlake Capital and ArcLight Capital.

Goldman took Petershill public in 2021, billing the enterprise as a way for public stockholders to gain exposure to the growth and returns of private PE groups. 

But Petershill has not worked on public markets. Its stock has slumped by a third while markets have soared. Now, Goldman is taking it private again. 

It’s yet another example of the clogged feeling pervading PE as groups race to exit over $3tn in ageing unsold deals. 

The company’s chair, Naguib Kheraj, told the FT that sector-wide struggles to sell PE portfolio companies had weighed on its share price.

“All the noise around the difficulty of realising positions has made investors cautious,” he said.

Job moves

• Advent International has named Christine Dagousset as an operating partner, where she will focus on the consumer and luxury sectors. She was most recently global innovation officer at Chanel.

• HSBC has named Victor Matarranz as head of international wealth and premier banking for the Americas and Europe. He joins from Banco Santander, where he was CEO of wealth management and insurance.

• Davis Polk has hired Oran Ebel as an investment management partner. He was previously deputy general counsel at Blackstone Credit.

Smart reads

Left behind Citigroup’s Jane Fraser has made good progress rectifying problems at the US bank. Despite that, Citi’s competitors are leaving it in the dust, Lex writes.

Quant disruption Commodities trading has for years been dominated by the likes of Glencore and Trafigura. Now a big quant hedge fund wants in on the action, Bloomberg reports.

Live for longer A bevy of biotech groups and start-ups are researching how to expand the human lifespan. They’ve attracted billions of dollars from investors, the FT reports.

News round-up

Entities linked to First Brands file for bankruptcy protection (FT)

Amazon agrees largest ever civil penalty in $2.5bn settlement with US regulators (FT)

US strikes deal with Musk’s xAI in sign of rapprochement with Trump (FT)

New England Patriots valued at $9bn as sport deal flurry continues (FT)

Goldman president criticises barriers to migration amid H-1B row (Bloomberg)

AI coding start-ups reap $7.5bn wave of investment (FT)

Nvidia-backed Nscale raises $1.1bn in investor frenzy over AI infrastructure (FT)

Activist investor moves to rustle up takeover interest in Upper Crust owner (FT)

Accenture to ‘exit’ staff who cannot be retrained for age of AI (FT)

Brunello Cucinelli shares sink as short seller makes new Russia allegations (FT)