Evercore recently released its annual survey of professionals in the private equity secondaries market. Some findings:
* The level of dry powder for secondary buyers is at a record high of $65 billion, which is up from an already-sizable $56 billion in June 2015. Another $40 billion of secondary fundraising is targeted for 2016. Of the current amount, more than 80% is controlled by the top 20 buyers.
* North America remains the most attractive region, followed by Europe and Asia. 39% of respondents said they would focus primarily on LP interests, 17% of directs/GP liquidity opportunities and the remaining 44% expressed no preference.
* In 2015, leverage became more important. 25% of deal volume was leveraged at the SPV level (compared to 17% in 2014), while LTV levels hit 40% (vs. 30%).
* The majority of respondents expect between $35-$40 billion in secondary volume this year, with around half saying that macro developments will be the driving factor (which is apparently separate from “public market performance” — which was the driving factor for 15% of respondents).
• Chip flip: Nagraj Kashyap is stepping down as head of Qualcomm Ventures, according to multiple sources familiar with the situation. No specifics yet on his next stop.
San Diego-based Kashyap has spent more than 12 years leading Qualcomm Ventures, which has backed such companies as Fitbit and Waze. He also launched the QPrize business plan competition and created the Qualcomm Robotics Accelerator.
A Qualcomm spokeswoman declined to comment. As our original tipster pointed out, fairly interesting to see departures by longtime heads of both Intel and Qualcomm’s VC units within just a few months of one another.
• In Bill We (used to) Trust: Still hurts too much. No additional comment.
• Fully insured: Last week we reported that Oscar Health, a New York-based healthcare insurance startup, was raising a large new round of financing led by Fidelity Investments. Our understanding, based on sources familiar with the situation, was that at least $150 million of the round was already spoken for, and that the final deal could value Oscar at upwards of $3 billion.
At around the same time we were hitting “publish,” Oscar was filing new stock authorization documents in Delaware.
The new information, first uncovered by VC Experts, shows that Oscar has authorized the sale of up to $400 million in new “Series A8” stock. The shares are valued at $6.75 each, which is 30% higher than its “Series A7” stock. If all of the authorized shares are actually issued, it would give Oscar a fully-diluted valuation of approximately $2.97 billion.
As an aside: It should be very interesting to see how Fidelity marks Oscar Health when it shows up on the monthly valuation report. There are estimates that the company is generating around $300 million in revenue from premiums (and still unprofitable). As a comp, United Health is currently generating around $157 billion in revenue, but trading at a market cap of $108 billion. Or what about Humana, which is valued at less than half of its $53 billion in revenue. If Fidelity really uses public rivals for private market comps, it’s hard to see how Oscar can stay anywhere near the price Fidelity just paid.
As another (more tenuous) aside: Oscar’s co-founder is Josh Kushner, whose sister-in-law is Ivanka Trump. Got to be an interesting Thanksgiving table, given that Oscar is entirely predicated on an Affordable Care Act that Donald Trump has pledged to repeal, if elected president.
THE BIG DEAL
• Johnson Controls (NYSE: JCI) has agreed to merge with Tyco (NYSE: TYC), following which Johnson Controls shareholders would own around 56% of the combined company and receive $3.9 billion in cash. Read more.
VENTURE CAPITAL DEALS
• Omni-ID, a Rochester, N.Y.-based provider of industrial RFID tags and visual tagging systems, has raised $21 million in new VC funding. GE Ventures, Stonehenge Growth Equity Partners and YFY group were joined by return backer Trillium International. www.omni-id.com
• mPrest, an Israel-based developer of monitoring and control software for the Internet of Things, has raised $20 million in Series A funding co-led by GE Ventures and OurCrowd. www.mprest.com
• HomePolish, a New York-based online platform for booking interior designers, has secured nearly $17 million of a new funding round that could total $21.5 million, according to a regulatory filing. New backers include Elephant VC, with partner Andy Hunt taking a board seat. www.homepolish.com
• iROKO, a Nigeria-based online entertainment platform, has raised $12 million in new equity funding from existing backers Canal+ and Kinnevik. Read more.
• Wingz, a San Francisco-based scheduled airport ride startup, has raised $11 million in Series B funding. Backers include Expedia Inc., Altimeter Capital and Marc Benioff. www.wingz.com
• DataXu, a Boston-based provider of programmatic marketing software for brands and agencies, has raised $10 million in new funding from Sky PLC (LSE: SKY). The company previously raised around $55 million in VC funding from Accomplice, Menlo Ventures, Thomvest Ventures and Flybridge Capital Partners. www.dataxu.com
• Prevalent Inc., a Warren, N.J.-based provider of vendor risk management and cyber threat intelligence analytics, has raised $8 million in Series B funding from Fulcrum Equity Partners and Spring Mountain Capital. www.prevalent.net
• Aircall, a French SaaS startup focused on quick deployment of enterprise phone systems, has raised $2.75 million in new VC funding. Balderton Capital led the round, and was joined by FundersClub. Read more.
• RetraceHealth, a Minneapolis-based provider of primary care through in-home and video visits, has raised an undisclosed amount of VC funding from Blue Cross and Blue Shield of Minnesota, HealthEast Care System and McKesson Ventures. www.retracehealth.com
PRIVATE EQUITY DEALS
• CoreHR, an Irish provider of cloud-based human capital management and payroll software, has raised an undisclosed amount of growth equity funding from JMI Equity. www.corehr.com
• J.C. Flowers & Co. has agreed to acquire the Australian and Japanese exchange businesses of Chi-X Global Holdings LLC, which handle around 11% of on-market equity trades in Australia and more than 1% of on-market trades in Japan. No financial terms were disclosed. Read more.
• Swander Pace Capital has acquired Swanson Health Products, a Fargo, N.D.-based online and catalog marketer of Swanson-branded and third-party healthy living products. No financial terms were disclosed. www.swansonvitamins.com
• Editas Medicine, a Cambridge, Mass.-based genome editing company, has set its IPO terms to 5.9 million shares being offered at between $16 and $18 per share. It would have an initial market cap of around $607 million, were it to price in the middle of its range. The pre-revenue company plans to trade on the Nasdaq under ticker symbol EDIT, with Morgan Stanley and J.P. Morgan serving as lead underwriters. Editas has raised around $210 million in VC funding, from firms like Flagship Ventures (16.6% pre-IPO stake), Polaris Ventures (15.6%), Third Rock Ventures (15.6%), Boris Nikolic (8.9%), Deerfield Management (5.7%), Fidelity (5.7%), Viking Global Investors (5.7%), T. Rowe Price, Google Ventures, Jennison Associates, Khosla Ventures, EcoR1 Capital, Casdin Capital, Omega Funds, Cowen Private Investments and Alexandria Venture Investments. www.editasmedicine.com
• Mapi Pharma Ltd., an Israel generic drugs developer, has set its IPO terms to 3.1 million shares being offered at between $15 and $17 per share. It would have a fully-diluted valuation of around $194 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol MAPI, with JMP Securities serving as sole underwriter. Shareholders include Shavit Capital. www.mapi-pharma.com
• Actis has sold its 92% stake in Energuate, Guatemala’s largest electricity network, to a wholly-owned subsidiary of Kenon Holdings (NYSE: KEN) for approximately $289 million. www.act.is
• AOL, a unit of Verizon (NYSE: VZ), has acquired AlephD, a Paris-based provider of real-time optimization ad strategies for online publishers. No financial terms were disclosed. AlephD had raised a small amount of VC funding from A Plus Finance, Cap Décisif Management and Partech International. www.alephd.com
• Mirae Asset Securities has agreed to acquire a 43% stake in Daewoo Securities for approximately $2 billion, in a deal that Bloomberg says will create South Korea’s largest brokerage by assets. Read more.
• Siemens AG has agreed to acquire CD-adapco, a Melville, N.Y.-based maker of engineering software, for nearly $1 billion in cash, according to Reuters. Read more.
FIRMS & FUNDS
• Origin Ventures, a Chicago-based VC firm, is raising upwards of $100 million for its fourth fund, according to a regulatory filing. www.originventures.com
Moving In, On & Up
• CCMP Capital Partners has “reduced the size of its back office team,” according to Dow Jones. Among those leaving are: Julie Casella-Esposito, a managing director focused on portfolio company HR; Jordan Ast, vice president; Andrew Coren, vice president; and Andrew Frailey, an associate. The story also reveals that John Warner, a managing director focused on the consumer, retail and industrial sectors, has left the firm after a 15-year run. Read more.
• Chad Hesse has joined Resilience Capital Partners, a Cleveland-based private equity firm, as general counsel. He previously was with Diebold Inc. (NYSE: DBL) as a VP and associate general counsel of global corporate affairs. www.resiliencecapital.com
• Tim Thomas has joined London-based private equity firm August Equity as a director focused on new investments. He previously was with Bridgepoint Development Capital. www.augustequity.com
• Warburg Pincus has named Daniel Zilberman as head of the firm’s European business. He joined the firm in 2005, co-founded its financial services team and relocated to Europe in 2013. He succeeds Joseph Schull, who will remain head of the firm’s European TMT group, and a member of its executive management team. Read more.
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