Come together, right now, over PE
Eight months into 2021 and the deals are coming thick and fast to make up for delayed processes. But the buy-side landscape has changed: infrastructure investors – and increasingly sovereign wealth funds – are beating out private equity and are doing that in large consortiums.
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This week amedes sold to a group that included OMERS Infrastructure, Goldman Sachs and AXA IM with no single party taking a majority stake. Consortium buyers have been on the rise since the pandemic as single buyers shy away from full exposure to a large asset. French hospital group Elsan sold to 7-8 buyers and a similar fate probably awaits Antin’s other large healthcare asset, Almaviva Sante, after the Kuwait sovereign fund emerged as a likely buyer.
The model has already seen success in Asia. Icon Group, itself for sale, was bought by a consortium led by sovereign fund QIC in 2017 for $1bn. It’s now being sold at a valuation of $2bn+ and with at least four infra investors, one sovereign wealth fund and one pension fund in the running we wouldn’t be surprised to see some pair together.
Infrastructure’s recent stomp into healthcare markets is interesting, particularly as it’s coupled with a move that sees it behave less like infra and more like private equity. Antin was one of the first to invest in healthcare when it bought amedes six years ago and partner Angelika Schöchlin tells HBI: “We always deploy the ‘PE toolkit’ regardless of sector, we’ve been doing it for a decade now. Active investors need an entrepreneurial approach.”
Infra funds do have access to cheaper capital than growth investors like private equity, so that combined with help from increasingly active sovereign wealth players is allowing it to bid at record high multiples. EQT’s infra arm reportedly paid high for its recent double buy of Meine Radiologie and Blikk in Germany.
Despite there supposedly being $1.6tn dry powder in private equity, the investment sector needs to watch out. Infrastructure and sovereign wealth funds have deep pockets, and are eyeing up your asset targets.
We would welcome your thoughts on this story. Email your views to Rachel Lewis or call 0207 183 3779.
