Overbay Capital Partners

Overbay Quarterly Update Q3 2019

December 15, 2019

Overbay Capital Partners is pleased to provide its quarterly update for the second quarter of 2019. In total, Overbay investors benefited from over 400 liquidity events across a diverse range of industries and geographies. Buyout (166) and Venture (152) represented the most active strategies for exits. The most active regions include North America (302) and Europe (104). There was liquidity coming from a variety of vintages, with the majority coming from 2006 (100) and 2007 (86) vintage year funds.

MARKET TRENDS & INVESTMENT THEMES

Despite strong earnings, global markets trended sideways due to macro developments including trade uncertainty, Brexit, and pessimism in the high-yield debt markets. As of September 30, 2019, the MSCI World Index was up 11.3% YTD, but was down 1.5% from the end of last quarter. Investors continue to monitor the presidential primaries, impeachment proceedings, global monetary policy and interest rate activity, among other developments that could adversely affect global economic indicators.

Global private markets fundraising has remained strong so far in 2019 and is on pace to meet 2018 levels at around $800 billion. In global private equity, the pace of deployment has eased as valuation levels remained high, with average Q3 2019 purchase price multiples across the US, Europe, and MSCI World indices remaining above 11x EBITDA. Private equity-backed exits remain robust and seller-friendly, but have slowed due to fewer IPOs and reduced M&A interest from strategic buyers in a high-valuation environment. Global venture capital fundraising has remained strong alongside the strong pace of venture capital investing. Robust exit activity continued through richly valued venture-backed unicorn 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 H1 2019. Deployment is on pace for a record year in 2019, expected to meaningfully surpass 2018’s record-breaking results of $73 billion.

Selected exits

  • • SentreHEART (Healthcare) – Acquired by AtriCure
    • OCP acquisition date: Q3 2017
  • • Cambridge Education Group (Education Services) – Acquired by Bright Scholar
    • OCP acquisition date: Q4 2017
  • • Acelity (Healthcare) – Acquired by 3M
    • OCP acquisition date: Q4 2017
  • • Bromium (Cyber Security) – Acquired by HP
    • OCP acquisition date: Q1 2018
  • • Corel Corporation (Software) – Acquired by KKR
    • OCP acquisition date: Q1 2018
  • • SignalFx (Analytics SaaS) – Acquired by Splunk
    • OCP acquisition date: Q2 2018
  • • Datadog (Monitoring SaaS) – IPO’d September 19, 2019 (NASDAQ: DDOG)
    • OCP acquisition date: Q2 2018
  • • 10X Genomics (Biotechnology) – IPO’d September 12, 2019 (NASDAQ: TXG)
    • OCP acquisition date: Q2 2018
  • • Teneo (Consulting and Advisory) – Shareholding sold to CVC
    • OCP acquisition date: Q2 2018
  • • Aspire Financial Services (Financial Services) – Acquired by PCS Retirement
    • OCP acquisition date: Q2 2018
  • • Vungle (Analytics SaaS) – Acquired by Blackstone
    • OCP acquisition date: Q2 2018
  • • Insurity (Software) – Acquired by GI Partners
    • OCP acquisition date: Q2 2018
  • • Punch Bowl Social (Restaurants) – Acquired by Cracker Barrel
    • OCP acquisition date: Q1 2019
  • • QSR (Restaurants) – Acquired by PAG Asia Capital
    • OCP acquisition date: Q2 2018
  • • CloudFlare (Software) – IPO’d September 13, 2019 (NYSE: NET)
    • OCP acquisition date: Q2 2018
  • • Fulcrum Therapeutics (Healthcare) – IPO’d July 18, 2019 (NASDAQ: FULC)
    • OCP acquisition date: Q2 2018
  • • Genpact (Professional Services) – Sold remaining stake
    • OCP acquisition date: Q2 2018
  • • Blue Tarp (Financial Services) – Acquired by Capital One
    • OCP acquisition date: Q3 2018
  • • Avedro (Healthcare) – Acquired by Glaukos
    • OCP acquisition date: Q3 2018
  • • WayPay (Financial Services) – Acquired by RBC
    • OCP acquisition date: Q3 2018

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.

Liquidity by Strategy
Liquidity by Vintage Year
Liquidity by Geographical Focus

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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