Supermarket mergers, private equity employment statistics and sizeable falls in profits are just some of the news stories grabbing Preqin's attention this week. Please note that some websites may require a subscription to view the article.
Competition regulator blocks Sainsbury’s £7.3bn takeover of Walmart’s Asda
This week, the UK’s competition regulator blocked the proposed £7.3bn takeover of Walmart-owned Asda by Sainsbury’s Plc. This comes as a blow to the supermarket group, which wanted to make the move in order to overtake market-leader Tesco. For Walmart, the deal was a way to exit Britain, one of the weakest performers in its global portfolio. Sainsbury’s, Walmart and Asda said they had mutually agreed to terminate the transaction, opting not to challenge the CMA’s ruling through the courts.
Private equity-backed businesses grow both revenues and employment, says BDO research
BDO’s analysis of 2,000 private equity-backed firms in the UK shows that private equity investments have boosted revenues by more than 50% in the past five years. The analyzed firms have generated an additional £17bn in revenues since 2013, and employed an additional 10,000 people in 2018. Over the past five years, the employee count has increased by 43% and created an additional 86,500 jobs in the UK.
Source: Private Equity Wire
The rise of ‘super carry’ unsettles private equity investors
Due to greater demand from institutional investors for access to the best funds, some top-tier fund managers have increased the performance fees charged for their latest funds. The practice – dubbed ‘super-carry’ – has unsettled a number of prominent institutional investors that feel this will create an imbalance in the levels of reward and alignment.
Source: Financial Times
Preqin Pro contains detailed profiles for more than 30,000 private equity funds, including information on performance and management fees charged as well as other fund terms & conditions. Arrange a demo today.
Private debt poaches bankers in search of better prospects
Deloitte’s recently published report found that there was a 10% increase in the headcount across the private debt industry in 2018, after a decade of substantial growth. These findings follow a spate of senior hires for the European direct lending industry over Q1 from established banking institutions.
For more data and analysis on compensation and employment in the private capital industry, take a look at our recently released 2019 Preqin Private Capital Compensation and Employment Review.
Deutsche Bank-Commerzbank merger talks collapse
Talks of a merger between Germany’s top lenders Deutsche Bank and Commerzbank have broken down; the banks cited multiple reasons for this, including the need for extra capital, restructuring costs, execution risks and why the merger is not in their best interest. Following the collapse, reports have suggested that ING and UniCredit could be interested in acquiring Commerzbank while UBS is looking at the DWS asset management arm of Deutsche Bank.
UBS investment bank suffers 64% fall in profits
UBS reported a 64% fall in Q1 profits in its investment bank, adding pressure to long-standing chief executive Sergio Ermotti. Executives blamed a lack of market volatility for a 22% decline in equities revenue compared with the same period last year. The investment bank’s pre-tax profits fell to $221mn from $619mn in the first three months of the year. On Tuesday, reports emerged that UBS and Deutsche Bank were in “serious” talks to merge their asset management units. Shares of UBS rose by 1% on Thursday, but have fallen 18% in the past 12 months.
Source: Financial Times