UPDATED. Access to private wealth is the opening theme of the day as I speak to Dominque Gaillard of GP stakes-focused private equity firm Armen about its plans for its tie-up with platform Private Corner.
Next, we take another look at whether generative AI is impacting dealmaking, with Julie Hood of EY giving her thoughts.
We then roundup some of the latest deals, with SGT Capital buying a digital access company from Summit Partners, Three Hills Capital Partners investing in a digital marketing business and LDC taking a stake in a legal services company.
Private wealth
We wrote a little while back about GP stakes-focused private equity firm Armen acquiring a 20 percent stake (with an option to go up to 30 percent) in Private Corner, a platform that works with wealth managers and financial advisors to help their clients access private equity funds.
I caught up with Dominique Gaillard, president of Armen, to find out what was behind the deal. The investment was at the GP level, rather than from its debut fund, Armen GP Stakes Fund I, on which the Paris-headquartered firm held a €150 million first close in March and made its first investment in April.
The tactic means that GPs in which Armen invests will be able to access the Private Corner network.
While some of the bigger private equity funds have been making inroads into the individual investor universe – check out my Q&A with Rashmi Madan, head of EMEA for private wealth solutions at Blackstone for more on that – the midcap GP players “don’t know how to approach this”, Gaillard told me.
“Every GP with whom we are discussing, every GP in which we invest, we can provide them the retail digital platform that will help them to onboard the retail investors of their country,” he said.
For the moment, Private Corner is a French platform, but Armen wants it to grow, with Benelux a likely first destination and Germany to follow, although Gaillard stressed that it was Private Corner’s responsibility to select funds – “we’ll never interfere with that”, he said.
“We want to help them develop outside France, we’ll give advice, if necessary, but the selection of the funds they want to commercialise, that’s their decision. We are never taking any decision at investment committee – we are always a minority investment.”
Read the full piece to find out why Private Corner stood out among its peers to Armen and Gaillard’s thoughts on where Europe is compared to the US when it comes to bringing retail money into private equity.
Editor’s note: This article originally stated that Armen’s stake was for 30 percent. It has been amended to say that the stake is 20 percent, with an option to go up to 30 percent.
Sacrosanct
Yesterday in the Dealflow we took a look at the potential uses of generative AI in private equity, including whether data protection rules could put a brake on its adoption.
I spoke to Julie Hood, EMEIA strategy and transactions leader at EY, who saw similar problems.
“We are looking at it, but we don’t use it for client outlooks,” she said. “For deals it’s not a current tool. Deals are confidential for a very good reason and we would need to be comfortable that AI tools are able to ringfence the data before we can explore further.
“The data and information are sacrosanct.”
Hood added that she couldn’t see the technology being adopted in dealmaking any time soon and while it may be used to increase data collation of publicly availably information, “it’s not disrupting the business right now”.
Looking ahead, the increasingly crossborder nature of private equity dealmaking could also create further stumbling blocks.
“As we get more international club deals, regulatory environments will be challenged,” said Hood. “There will be an intersection with the political setting of regulatory regimes.”
I’d love to get your thoughts on whether generative AI is forming part of your work processes or your thoughts on the tech more generally. Send them over to me at craig.m@pei.group
Digital access
SGT Capital has agreed to acquire Elatec, an international developer and supplier of a range of secure physical and digital access products, from Summit Partners.
The deal was valued at around €400 million.
Elatec is headquartered in Puchheim, Germany. The company has over 150 employees.
“Elatec is a market leader in secure physical and digital access solutions globally and combines a strong IoT platform with SaaS device management and mobile authentication technology solutions that are essential for the structural global growth of increasing interconnectivity and the need for increased physical and cyber security,” said Joseph Pacini, co-managing partner of SGT Capital.
Summit Partners invested in Elatec in 2018.
Marketing
Three Hills Capital Partners (THCP), via THCS IV, has agreed to invest around €64 million in Digital360, an Italian provider of digital marketing and advisory services.
THCP will invest using a mix of preferred capital, loan, and equity instruments.
“We see the investment in Digital360 as an opportunity to support an innovative business with an experienced management team that has already demonstrated an impressive track record for growth, executing around 30 successful M&A acquisitions completed to date, further underpinned by positive market tailwinds,” said Michele Prencipe, partner at THCP.
Law
LDC has made a minority investment in The Barrister Group (TBG), a technology-enabled legal services company.
TBG is the umbrella group for Clerksroom Chambers and Clerksroom Direct.
LDC’s investment will enable TBG to attract more barristers and instructions with its alternative chambers model, while supporting existing members and investing further in its proprietary technology to support the growth of the business, according to a release.
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