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| The Daily Pitch |
| PE, VC and M&A |
| Your edge on global private capital markets |
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| Good morning. In today's Daily Pitch, we look at a $1 billion continuation fund for Centauri Health, what got investors hyped at Slush and PE sports investing's evolution from teams to media rights. |
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| Abry targets $1B continuation fund for Centauri Health |
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| Boston (Prasit Photo/Getty Images) |
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By Rod James, Private Equity Senior Editor
Abry Partners is raising a continuation fund to extend its control over Centauri Health Solutions, a software provider to the healthcare industry whose valuation has ballooned since 2020.
The Boston-based middle-market buyout shop is giving investors in Abry Partners Fund IX, which acquired Centauri in 2020, the option to sell their holdings to secondary investors or roll into a continuation fund, according to several people familiar with the matter.
As much as $1 billion could be raised to buy Centauri out of its original fund, the people said.
Centauri had an enterprise value of $325 million at the time of Abry's acquisition in 2020, according to PitchBook data. The company has grown significantly since, partly through a series of add-on acquisitions. Most recently, it acquired MedAllies, which focuses on the secure transfer of healthcare information.
Investors in Centauri have been offered a "status quo" option, meaning they can choose to stay invested in the business under the same economic terms as before, one person familiar said.
GPs use continuation funds to buy companies out of their older funds. These special purpose vehicles give the GP more time and capital to grow the companies while providing an exit to investors who want it.
The continuation fund market is on track for a record year in 2025, according to survey data from Evercore. These vehicles raised around $48 billion in H1—well on pace to beat the previous full-year record of $71 billion in 2024, the report said.
These vehicles are often used to help fund managers extend their hold of top-performing assets. They can also be used to hold on to businesses that GPs are unable to sell outright for the desired price.
The strong uptick in continuation fund activity has coincided with valuation disconnects in M&A, which have hobbled dealmaking since interest rates shot up in early 2022.
The M&A market has shown signs of turning around in recent months. There were 13,000 deals globally worth $1.3 trillion in Q3, a level not seen since the 2021 peak, according to PitchBook data. |
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| A message from Clearwater Analytics (CWAN) |
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| Are alternatives still alternative for insurance assets? |
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Allocations to alternative assets that are outside of the traditional public equity and income markets have delivered outstanding growth over the past decade. CWAN’s database of more than 400 insurers shows that alts holdings have grown from $180 billion to almost $900 billion in the past 7 years.
Have alts become just one more part of a core investing strategy? CWAN’s Research Desk has published a detailed analysis of this data, representing $4.4 trillion in combined AUM, to explore the question in more detail.
Read the blog to get a summary of key findings and consequences or download the full report for additional details on the typical makeup of insurers’ alternative holdings and benchmarks of different types of firms. |
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• PE firms are hoovering up sports media rights in Europe, with buyer appetite driven less by the glamour of club ownership and more by steady media rights cash flows. Read more
• Our interactive Global League Tables for Q3 rank the top investors, advisers and more by region, across the full range of private market activity. Who led the way?
• New Mountain Capital is seeking around $500 million for a GP-led private credit secondaries deal, according to market sources. Read more |
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| VCs weigh AI bubble fears, Europe's defense awakening at Slush |
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| (Courtesy of Agustin Garagorry/Slush) |
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By Leah Hodgson, Senior VC Reporter
As more than 13,000 people, including 3,500 investors, descended on Helsinki for this year's Slush startup conference, AI's future and the surge of interest in defense tech emerged as key topics.
Despite Europe anticipating another year of declining deal counts, the event venue greeted attendees with a bold message last week: "Still doubting Europe? Go to Hel."
And investors echoed Slush's buoyant message.
"I've never been more bullish about Europe," Creandum GP Staffan Helgesson said during an onstage panel conversation. "There are a lot of things we need to fix here, but we have great founders, investors and talent. Europe has a talent advantage right now, with the US cutting down on immigration."
Investors' flight to quality in terms of dealmaking has persisted so far, but one sector above all others has had no issues raising capital: AI.
Most, if not all, of the panels during the main conference featured at least an element of AI, and the sector's sustainability in terms of dealmaking was at the forefront of many investors' minds.
"I think we'll see a correction in AI next year," HV Capital partner Mina Mutafchieva said. "Maybe not Armageddon, [but] we could slide into the trough of disillusionment."
While many investors acknowledge that the pace of investment and current growth rates are unsustainable, OpenOcean GP Tom Henriksson believes that AI's long-term potential is not overblown.
Appetite for defense tech is almost as frenzied, with 2025 marking the first year that Slush has dedicated a panel to the sector during the main conference.
"With the changing nature of war, we need every technological advantage, and that is going to come from startups," said Marcin Hejka, co-founder and managing partner of OTB Ventures.
European defense tech startups raised over $4 billion in the first nine months of this year, putting 2025 on track for record levels of funding, according to PitchBook research. |
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Smart reads that caught our eye.
• "The golden handcuffs aren’t so golden anymore." While success in PE was once tied to a job at a big-name firm, employees are leaving those behind in favor of positions at smaller asset managers. [The Wall Street Journal]
• Is Google's search engine dominance actually threatened by AI? After a federal judge concluded that AI innovation would disrupt Google's monopoly, some experts aren't so sure. [Bloomberg]
• AI infrastructure investments may be too reliant on debt. Investors are concerned that continued AI investments could have a negative impact on tech stocks. [Reuters] |
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