Private equity firms are increasingly keen to consolidate industry peers to diversify assets, increase geographic reach and grow assets under management. Within that, infrastructure firms are particularly popular, potentially due to the asset class’s natural resistance to macroeconomic challenges, namely inflation. The latest firm to jump on this is General Atlantic, as the growth investor has agreed to acquire sustainable infrastructure investor Actis.
Automotive is a segment where we’ve seen activity ranging from leasing software to racing car parts. This morning we have a deal involving repairs, with Oakley Capital agreeing to invest in an independent collision repair group.
We also have a treat for fans of our outlook Q&A series. PE Hub Europe’s Irien Joseph caught up with Triton Partners’ Claus von Hermann and Thomas Hofvenstam, managing partners and co-heads of Triton mid-market, who expect a rise in industrial tech corporate carve-outs in 2024.
Let’s start with the latest private markets consolidation move. General Atlantic has agreed to acquire Actis to create a diversified, global investment platform with around $96 billion in combined assets under management.
Actis will become the sustainable infrastructure arm of GA’s global investment platform.
General Atlantic was attracted to Actis as it is in a good position to take advantage of the energy and digital transition trends, while the two have “complementary” investment themes, including the shift in economic power to growth markets like Asia, according to a source familiar with the matter. The tie-up will also create an offering for investors covering sustainable infrastructure, real estate, digital infrastructure, growth equity and credit, the source added.
Chairman and senior partner Torbjorn Caesar will continue to lead Actis, which will retain independence over its investment decisions and processes with its funds operating under the existing Actis brand, according to a release.
“Addressing the global paradigm shift toward sustainability requires an economic transformation and a capital investment on a massive scale,” said Bill Ford, chairman and CEO of General Atlantic. “With the addition of Actis, we are taking a significant step forward to add a sustainable investment capability which positions General Atlantic to capture this opportunity set for our investors.”
Actis is a London-based global investor in sustainable infrastructure with around $12.5 billion in assets.
GA is not alone in its interest to add an infrastructure arm.
Just last week, BlackRock agreed a $12.5 billion cash and share deal for Global Infrastructure Partners, as covered by our colleagues on Infrastructure Investor.
CVC Capital Partners announced in September it would acquire a majority stake in DIF Capital Partners, an independent infrastructure fund manager. Rolly van Rappard, CVC chair and co-founder, called the acquisition the “next logical move” for CVC, given the long-term secular growth trends in infrastructure and its adjacency to the firm’s existing strategies.
Bridgepoint made a similar move in September, announcing the acquisition of Energy Capital Partners, resulting in €57 billion of AUM across the joined-up group.
(Note: Bridgepoint owns PEI Group, the publisher of PE Hub Europe.)
Ready, set, repair
Switching over to automotive. Oakley Capital has reached a conditional agreement to invest in Steer Automotive Group, a UK-based independent collision repair group.
Oakley will acquire the shares held by Keyhaven Capital Partners and Chiltern Capital as part of the transaction.
Steer has expanded through 18 acquisitions, establishing a network of over 100 repair centres. It is a partner for the UK’s vehicle insurers, accident management companies and OEM dealerships, holding 43 manufacturer accreditations, including recommendation and approval for brands such as Porsche, Rolls-Royce, Bentley, McLaren, Lamborghini, Aston Martin, Tesla and Mercedes Benz.
Oakley’s investment will facilitate Steer’s next stage of growth within the fragmented collision repair market, strengthening its investment in its facilities, development and training through the Steer Academy programme, and EV repair capability to meet the demands of newer, more technologically advanced vehicles, according to a release.
There could be an increase in corporate carve-outs this year, particularly in the industrial tech segment, according to Claus von Hermann and Thomas Hofvenstam, managing partners and co-heads of Triton Partners’ mid-market, who spoke to Irien Joseph in the latest of our outlook Q&A series.
Here’s a snippet from the story:
What opportunities do you see in 2024, and what are you most looking forward to?
Thomas Hofvenstam: Triton is different to many private equity firms in the sense we like it when conditions get trickier, because we are a through-cycle investor. We focus on fundamentally sound companies that are operating below their full potential and take an operational approach to helping them reach that potential. We are excited about the pipeline of opportunities we see, as there are now even more companies that fall into our sweet spot of having the potential to be great, but due to temporary headwinds or operational issues, need help to get there.
What are the deal trends in the industrial tech sector?
Claus von Hermann: We expect to see a significant number of corporate carve-outs in our target sectors and particularly in industrial tech. Over 60 percent of listed corporates in the space mentioned ‘portfolio management’ in their results calls in Q2 2023 and this is an ongoing trend. For example, we recently announced the acquisition of Trench from Siemens Energy. We’ve completed many corporate carve-outs over the last 25 years and we expect to do more.
Take a look at the full story to see what Triton’s most significant deals were last year and what is driving activity in industrials.