Overbay Capital Partners is pleased to provide its quarterly update for the second quarter of 2019. Overbay investors benefited from well over 400 liquidity events across a diverse range of industries and geographies. The largest number of liquidity events occurred through Buyout (217) and Venture (207) strategies. The most active regions include North America (382) and Europe (78). There was liquidity coming from a variety of vintages, with the majority coming from 2006 (144) and 2007 (108) vintage year funds.
MARKET TRENDS & INVESTMENT THEMES
Global markets made a strong rebound in H1 2019, after markets bottomed at the end of 2018. As of June 30, 2019, the MSCI World Index was up 13.1% from the end of 2018, and was up 2.5% over the quarter. Increasing yield in the debt markets and escalating trade tensions between the USA and China have led to periodic volatility.
Global private markets fundraising was strong in H1 2019 and is expected to be on pace to meet 2018 levels at around $800 billion. In global private equity, buyers have become more wary of high valuation levels while sellers have become more motivated. Average Q2 2019 purchase price multiples across the US and MSCI World indices remaining above 11x EBITDA, while European multiples have declined to the 10x levels. Investment and exit activity picked up relative to the first quarter, driven by record levels of dry powder and a rebound in global markets. Global venture capital fundraising has picked up despite a slightly slower first quarter, alongside the strong pace of venture capital investing. Exits maintained strong momentum through several high-profile venture-backed IPOs, while private company valuations continue to increase across all financing stages.
In the private equity secondary market, global deal volume reached $42 billion in the first half of the year. Global deal volume is expected to surpass 2018’s record-breaking results of $73 billion, as deployment sees no signs of slowing with the high levels of dry powder in the secondary market.
Selected exits
NGM Biopharmaceuticals (Pharmaceuticals) – IPO’d April 4, 2019
Vyze (Payment Tech) – Acquired by MasterCard
Fieldbrook Foods (Frozen Desserts) – Acquired by Wells Enterprises
Looker Data Sciences (Software) – Acquired by Google
Uber (Software) – IPO’d May 10, 2019
DOSE Medical Corp (Healthcare) – Acquired by Glaukos
Protean Electric Limited UK (Automotive) – Acquired by NEVS
LiveU (Video Streaming) – Acquired by Francisco Partners
JIBE, Inc. (Software) – Acquired by iCIMS
Hotel Tonight (Travel and Hospitality) – Acquired by Airbnb
Antelliq (Technology) – Acquired by Merck
Masternaut (Telematics) – Acquired by Michelin
CheMes (Industrials) – Acquired by Innova Capital
EG (Software) – Acquired by Francisco Partners
MultiView Inc. (B2B Digital Marketing) – Acquired by the Stagwell Group
Quantenna Communications (Wi-Fi Tech) – Acquired by ON Semiconductor
Care Fertility (Fertility Clinic) – Acquired by Silverfleet
Core Power Yoga: (Yoga Studios) – Acquired by TSG
SteelSeries (Manufacturer of Gaming Equipment) – Acquired by Axcel
US Renal Care (Healthcare) – Acquired by a private investor group
OCP acquisition date is the quarter in which OCP acquired exposure to the company through a secondary purchase. Select companies listed are held within one or more fund structures in which OCP is a limited partner.
Overbay Capital Partners is a Toronto-based private equity secondaries firm. Overbay’s funds provide its investors with accelerated exposure to diversified private market investments and sellers with a variety of liquidity solutions. More about Overbay can be found at www.overbaycapital.com.
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