Good morning Eurohubsters, Craig McGlashan here with Thursday’s Dealflow.
The financial services sector is the hot topic of the day, but rather than focus too long on the troubles of Silicon Valley Bank and Credit Suisse, we take a look at one area that some in private equity believe just became an even more attractive investment in the UK thanks to new rules on pension contributions.
Deals-wise, we feature a small-cap deal by IK Partners and we have a promotion at CapMan Buyout to report.
Share the wealth.
There’s been a lot of focus on the banking industry of late, particularly the collapse of Silicon Valley Bank – read about what it could mean for the life sciences business here – and the troubles of Credit Suisse (although the latter’s share price rallied this morning after the Swiss National Bank said it was willing to give the lender a liquidity backstop).
But our focus this morning is on a different area of financial services – one that just got a little more attractive for private equity investors.
Yesterday, the UK chancellor of the Exchequer Jeremy Hunt announced as part of the 2023 national budget that the annual tax-free pension savings allowance would rise by 50 percent from £40,000 ($48,332; €45,515) to £60,000 and the lifetime allowance on pension savings of £1 million would be scrapped.
Demographics and growing savings pools already meant the wealth management sector was an attractive bet for private equity firms, Jerry del Missier, founder and executive chairman of London-based, financial services-focused PE firm Copper Street Capital told me a few months ago.
The pensions switch is likely to boost that trend, he told me yesterday afternoon.
“We’re delighted to see the increased pension allowances – annual plus lifetime – and see this as a boost to savings, which in turn will be very supportive to wealth management and savings-related businesses. We’re particularly pleased that it’s not a one-off but rather one whose effects will be long-lasting.”
For a roundup of some of the wealth management deals we saw last year, check out this listicle I wrote a back in November.
Infrastructure.
IK Partners, through its IK Small Cap III Fund, will invest in Veldeman Group, a Belgian designer and producer of temporary infrastructures.
Veldeman is headquartered in Bree, Belgium and has around 80 full-time employees.
Veldeman’s management will reinvest alongside IK.
“The fragmented nature of the market offers significant buy-and-build potential which will allow the company to both further develop its offering and expand into adjacent markets and territories,” said Frances Houweling, partner at IK Partners and advisor to the IK Small Cap III Fund.
For more on IK Partners’ small-cap team, check out Nina Lindholm’s profile of Morgane Bouhenic from earlier this week.
Promotion.
CapMan Buyout has promoted Maija Joutsenkoski to partner, with effect from 1 April.
“Maija is a great cultural fit with the team, was a valuable member of the Hydroware investment team and is a key case team member in several of our portfolio companies,” said Johan Pålsson, co-managing partner at CapMan Buyout.
Joutsenkoski joined CapMan in 2022. Before then, she headed the corporate strategy team at UPM-Kymmene.
Joutsenkoski also worked at Nordic Capital as an investment manager in Stockholm and Helsinki, and as an analyst at Goldman Sachs’ Nordic investment banking team in London.
Recent deals involving CapMan Buyout include its exit from Malte Månson to Accent Equity in February.
That’s all from me – Nina Lindholm will be with you tomorrow as usual to round out the week.
Cheers,
Craig
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