After what proved to be a record-breaking year for deals, some key macro factors are spelling trouble for the private markets. Inflation is high, with the consumer price index rising 7.5% for the 12 months ending in January. The Federal Reserve says it will start lifting interest rates this month. Labor shortages are driving up employee expenses at portfolio companies and funds alike. And supply chain issues are slowing down or driving up the cost for transporting goods. Then there’s the potential for global economic fallout following Russia’s invasion of Ukraine, the most significant attack on another country since World War II. The stock market is swinging (down nearly 10% from the beginning of January as I write this), and tech stocks are not having a very good year.

What does it all mean for PE funds, which came into 2022 bigger and better-capitalized than ever?

Here’s a look at fees generated by the five largest private equity firms last year, as reported in fourth quarter earnings: (Note that, per Pitchbook, growth in Blackstone’s non-traded REIT and credit product contributed to its spike for this quarter)

And the amount of assets managed by these firms has spiked as well—to a significant degree:

Part of this growth stems from the plethora of funding limited partners have thrown into private market funds. More than 75% of venture capital and private equity firms reported raising capital in 2021, according to a new report Silicon Valley Bank published last week. But that doesn’t appear to be slowing down the hunt for even more capital—more than 80% of firms plan to raise cash again this year.

Here’s a look at the number of funds closed in 2021. Venture capitalists, in particular, closed a whopping 905 funds, up from 563 in 2020.

While firms expect to raise more capital, they also anticipate having to spend more cash to keep their businesses up-to-par. The budgets for travel expenditures, in particular, are expected to grow by approximately 20%, per Silicon Valley Bank. That’s a signal that firms anticipate the world will start getting back to normal this year. That sounds pretty familiar, but at this point I’m not holding my breath, as a new coronavirus variant could, of course, force another reversal. 

Despite the troublesome macro-environment, firms still appear bullish on the private markets and the investments they’ll land in 2022—even if they expect valuations and pricing may come down. 

Divesting difficulties: As I mentioned earlier this week, companies like BP and Equinor have pledged to divest their assets from Russia after its invasion of Ukraine, but given bank blockades and reverse divestiture complications, that may not be as simple as it sounds. You can read more about that in Axios.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- OpenSpace, a San Francisco-based startup that develops machine vision technology for the construction industry, raised $102 million in funding led by PSP Growth and was joined by investors including BlackRock, Alkeon Capital Management, and Menlo Ventures.

- Payhawk, a London-based payment and expense solution company, raised an additional $100 million Series B funding led by Lightspeed Venture Partners and was joined by investors including Sprints Capital, Endeavour Catalyst, HubSpot Ventures, Jigsaw VC, Greenoaks, QED Partners, and Earlybird Digital East.

- Sanctuary, which is based in Vancouver and manufacturers robots to serve as personal assistants, raised $58.5 million from investors including Verizon Ventures, Evok Innovations, and Workday Ventures. 

- Rialtic, an Atlanta, Ga.-based enterprise software platform for healthcare insurers and providers, raised $28 million in Series A funding led by F-Prime Capital and was joined by investors including Oak HC/FT, Health Velocity Capital, and Noro-Moseley Partners. 

- Anrok, a San Francisco-based sales tax solution for SaaS businesses, raised $20 million in funding led by Index Ventures and Sequoia. 

- Rupa Health, a San Francisco-based digital healthcare platform that assists doctors with ordering lab work, raised $20 million in Series A funding led by Bessemer Ventures and was joined by investors including First Round Capital, Lachy Groom, SV Angel, Floodgate, Hustle Fund, Operator Collective, the Chainsmokers, Jared Leto, Joe Montana, and others. 

- ​​Thetanuts Finance, a Williamsburg, Va.-based yield-generating crypto company, raised $18 million in seed funding led by Three Arrows Capital, Deribit, QCP Capital, and Jump Crypto.

- Fieldguide, a San Francisco-based automation and workflow collaboration platform, raised $17 million in Series A funding led by 8VC and was joined by investors including Floodgate, AICPA/CPA.com, and others.

- H2U Technologies, a Chatsworth, Calif.-based company focused on scaling the hydrogen economy, raised $11 million in Series A funding led by Jericho Energy Ventures, Freeflow Ventures, VoLo Earth Ventures, and Hess Corporation.

- Legends of Learning, a Washington, D.C.-based educational gaming platform for K-12 students, raised $5 million in seed funding led by Konvoy Ventures and was joined by investors including co-founder and CEO of fitbit James Park, co-founder at Kabam Holly Liu, partner at Lightspeed Venture Partners Jeremy Liew, and co-founder and CEO of Crunchyroll Kun Gao. 

- InspectHOA, a San Francisco-based HOA platform developer focused on bringing transparency to home deals, raised $3.1 million in seed funding led by SVQUAD and was joined by investors including Inventus Capital Partners, DevRev CEO and co-founder Dheeraj Pandey, and other angel investors. 

- Here, a Miami-based vacation rental investment marketplace, raised $2 million in pre-seed funding from investors including Joe Montana’s Liquid 2 Ventures, Mucker Capital, Bragiel Brothers, Alumni Ventures, Gaingels, and others.

-  The Host Co., a Los Angeles-based, digital commerce marketplace for short-term rentals, raised $1.85 million in seed funding led by HearstLab and was joined by investors including The Artemis Fund and Untapped Capital. 

PRIVATE EQUITY

- Advent International Corporation, Permira, Crosspoint Capital Partners, Canada Pension Plan, GIC, and a wholly-owned subsidiary of the Abu Dhabi Investment Authority acquired McAfee, a cybersecurity company. Financial terms were not disclosed. 

- Blackstone acquired Supergoop!, a San Antonio, Texas-based skincare brand. Financial terms were not disclosed. 

- Mercer Global Advisors acquired Benemark, a Westport, Conn.-based wealth management firm. Financial terms were not disclosed.

EXITS

- AbbVie acquired Syndesi Therapeutics, a Ottignies-Louvain-la-Neuve, Belgium-based drug molecule developer used to treat Alzheimer’s, from Novo Holdings for up to $1 billion with $130 million upfront.

- GTCR acquired a majority equity stake in Experity, a Machesney Park, Ill.-based urgent care and management software company, from Warburg Pincus, who retained a minority stake in the company. As part of the deal, Experity management reinvested in the company.

OTHER

- Goldfinch and Baupost acquired Convera, formerly Western Union Business Solutions, a Seattle-based business payments platform, for $910 million.

- Cengage Group acquired Infosec, a Madison, Wis.-based provider of cybersecurity education and training, for $191 million.

- Ro acquired Dadi, a New York-based sperm collection and testing startup, for approximately $100 million.

- Huntington Bancshares agreed to acquire Capstone Partners, a Boston-based investment banking and advisory firm. Financial terms were not disclosed.

- National Fire & Safety acquired Absolute Fire Protection, a Glendale, Ariz.-based fire and life safety service provider. Financial terms were not disclosed. 

- Securly, acquired Dyknow, an Indianapolis, Ind.-based classroom management software company. Financial terms were not disclosed.

- Shift4 agreed to acquire Finaro, a Valletta, Malta-based ecommerce payments provider and The Giving Block, a Washington, D.C.-based company focused on cryptocurrency fundraising for nonprofits. Financial terms were not disclosed.

IPOS 

- GLP, a Singapore-based real estate investor, filed confidentially to take its investment management business public in the U.S., per Bloomberg. An IPO could raise approximately $2 billion.

SPAC

- Ecarx, a Chinese smart car technology company backed by Zhejiang Geely Holding Group, is weighing going public in the U.S. via a SPAC merger, according to Bloomberg.

FUNDS + FUNDS OF FUNDS

- Accel-KKR, a Menlo Park, Calif.-based private equity firm, raised $1.35 billion for a fourth fund focused on minority preferred equity investments in software and technology-enabled services companies.

- Electric Capital, a Palo Alto, Calif.-based venture capital firm, raised $1 billion for a new fund focused on crypto networks, Web3 protocols, and blockchain-enabled businesses. 

- Accel, a Palo Alto, Calif.-based venture capital firm, raised $650 million for a seventh fund focused on investing in startups in India and Southeast Asia.

- Cigna Ventures, the Bloomfield, Conn.-based venture capital arm of Cigna, raised $450 for a new fund focused on health tech startups. 

- CommerzVentures, the Frankfurt, Germany-based venture capital arm of Commerzbank, raised €300m ($332.87 million) for a third fund focused on early and growth-stage companies in the fintech, climate fintech, and insurtech sectors.

- Serena Ventures, the San Francisco-based early stage venture capital firm by tennis star Serena Williams, raised $111 million for its first fund focused primarily on founders with underrepresented backgrounds.

PEOPLE

- a16z, a Menlo Park, Calif.-based venture capital firm, hired Zane Lackey as general partner. Formerly, he co-founded Signal Sciences.

- Schulte Roth & Zabel, a New York-based hedge fund, hired Alexander M. Kim as partner and head of the intellectual property, sourcing & technology group. Formerly, he was with Cahill Gordon & Reindel.

- TZP Group, a New York-based private equity firm, hired Tamar Shapiro as partner of data & analytics. Formerly, she was with Instagram.