18 June 2024 – Page 5 – The Fund Society

US biotech Illumina faces steep loss from forced sale of Grail

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Shell beats Saudi Aramco to Temasek’s LNG business

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PwC appoints director for special situations and restructuring M&A

Multinational accounting firm PwC has appointed Jamie Peel as Director of its lead advisory team. In his new role, Peel will lead the firm’s special situations and restructuring M&A offering in the north of England.

Peel will be based in PwC’s Manchester office.

According to a press statement, Peel specialises in public company M&A and takeover code transactions, advising boards, bidders and vendors on takeover, reverse takeover and bolt on M&A.

Peel previously served as corporate finance director at financial services group Zeus Capital, where he was responsible for executing M&A transactions across sectors and transaction types.

intel News

Pritzker Private Capital seeks $3bn for new family direct investing fund

Pritzker Private Capital, the Chicago-based private equity firm founded by heirs to the Pritzker family fortune, is targeting $3bn for its fourth buyout fund, Pritzker Private Capital IV, according to a report by Buyouts Insider.

The new fund is expected to close in Q4 2024, according to documents from the Plymouth County Retirement Association.

The firm’s previous fund, PPC III, closed in 2021 at $2.7bn, marking it as one of the market’s largest family investment vehicles at the time and a significant increase from Pritzker’s second fund, which raised $1.8bn in 2018.

PPC III was earning a 1.4x gross multiple and an 18.8 percent gross IRR as of December 2023, while PPC II was generating a 2x gross multiple and a 21.5 percent gross IRR, according to the Plymouth County documents.

Established in 2002 by Tony Pritzker and his brother JB Pritzker, members of the billionaire family behind Hyatt Hotels, the firm initially operated as a family wealth manager and now invests both family and third-party institutional capital in mid-market buyouts. Tony Pritzker currently serves as chairman and CEO, while JB Pritzker left the firm to become the governor of Illinois in 2019.

Pritzker Private Capital emphasises flexible, long-duration investing, a strategy known as family direct investing, setting it apart from the traditional private equity model that typically targets an exit within three to five years.

The firm primarily makes control investments in North American businesses in the manufactured products and services sectors, with EBITDA of more than $15m and enterprise values ranging from $200m to $1.5bn or greater. Pritzker’s preferred deal types include family or founder liquidity events, management buyouts, corporate carveouts and industry consolidations. The firm writes equity checks of $100m to $400m per deal, with the capacity to deploy up to $750m.

Pritzker’s portfolio currently includes 17 investments, the most recent being HeartLand, a commercial landscaping services provider acquired from Sterling Investment Partners. Last October, Pritzker also invested in insurance broker and employee benefits provider Lawley and acquired multinational food products company Sugar Foods Corp.

Is The FTSE 100 Anti-ESG?

UK investors often describe the FTSE 100 as a collection of “old economy” stocks, which face heavy scrutiny over environmental, social, and governance concerns. But is the London Stock Exchange inherently high risk from an ESG perspective and how does it compare to rival markets?

Morningstar’s Sustainalytics company-level ESG Risk Score measures the extent to which a company’s economic value is put at risk by relevant ESG factors.

The ESG Risk Score looks at a company’s exposure to specific material risks and it evaluates how well it is managing those risks.

When looking at the iShares Core FTSE 100 ETF (ISF), a proxy for the FTSE 100, according to Sustainalytics data, the corporate percent of the portfolio covered by a negligible, low, medium, high or severe ESG Risk score was 4.39%, 31.73%, 41%, 22.88% and 0% respectively. So more than half of the index has an ESG risk of medium and above.

And out of the top 10 companies by market capitalisation in the Morningstar UK index, four out of the 10 leaders have a high ESG risk rating.

Glencore (GLEN), one of the world’s largest commodity traders in markets for metals and minerals, led the pack with a score of 37.

The company is followed by BP (BP), Shell (SHEL) and Rio Tinto (RIO), which reported a high ESG risk of 33.8, 32.4, and 32.3 respectively.

Why Are These Stocks Controversial?

Glencore is allotted a severe controversy rating by Sustainalytics, with its top ESG issues being bribery and corruption, community relations, emissions, effluents and waste, as well as occupational health and safety.

Of late it has come under scrutiny for recording a huge increase in carbon emissions last year, despite its low emissions targets.

Its emissions rose 8.8% in 2023 to 432.8 million tonnes of carbon dioxide after it expanded coal production and reopened an oil refinery in South Africa.

Although BP and Shell have similar ESG risk scores, the oil and gas conglomerates diverge on their controversy rating.

BP finds itself with a “significant” controversy rating whilst Shell is seen as more problematic with a high controversy rating.

Although the two oil and gas majors share ESG issues ranging from emissions to occupational health and safety, bribery and corruption is a theme that blemishes BP’s record whilst one of Shell’s top ESG issues is community relations.

In 2019, BP was found to have promised around $10 billion (£7.82 billion)

ESG, ESG FUNDS, ESG INVESTING, ESG WEEK

Columbia Threadneedle’s Scott Spencer reappears at Square Mile as investment director

Spencer joins after departing from Columbia Threadneedle Asset Management in April, when he and several other senior members of the firm left as part of the firm’s restructure. He worked at Columbia Threadneedle for over a decade, originally joining BMO Asset Management’s LLP multi-asset team as a partner, which was then became part of the former firm in 2021. Mark Harries joins Square Mile as CIO as Broomer steps down Prior to that, Spencer worked as a portfolio manager and vice president at Credit Suisse Asset Management, focusing on analysing and recommending equity and fixed in…

Rich countries plan to buy more gold despite record price

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New Capital’s Oisin O’Leary: Why we are holding fire on UK opportunities until we see rates cut

Valuations on UK equities compared to their own history and versus continental and global peers potentially put fund managers in a state of readiness as they await the next move in interest rates. Out of favour The suggestion that the UK market is ‘cheap’ and unloved is dominating the finance pages, with many commentators expecting an acquisition flurry from private equity and overseas investors. UK economic growth flatlines in April The asset’s poor image is perhaps best personified by UK-based insurance and pension funds, which owned 52% of UK equities in 1990 but only own arou…

Printer does not go brr any more

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Temasek to invest up to $198m in Australian ETF manager Betashares

Singapore-based investment firm Temasek Holdings (TEM.UL) will invest up to A$300 million ($198.4 million) in Australian exchange-traded fund manager Betashares, the company said on Monday.

The funding is expected to drive the expansion of Betashares’ offerings in Australia and overseas, it said in a statement.

With the investment, Temasek will hold an undisclosed minority stake in Betashares, joining its staff members and private equity firm TA Associates as shareholders, it added.

The Australian ETF industry’s market capitalisation reached A$177.5 billion in 2023, boosted by net inflows of A$15 billion, according to the latest data compiled by Betashares.

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Betashares, one of the country’s biggest ETF firms, manages over A$38 billion in assets and serves over a million investors in Australia, according to its website.

“The investment by Temasek will help accelerate the next phase of our journey, both organically as well as through acquisitions and strategic investments,” Betashares Founder and CEO Alex Vynokur said.

Construction engineering group Ackermans & Van Haaren (AvH) has partnered with STAR Capital to…