August by D’Ornano + Co.: Introducing the concept of “Growth Assets”, new interest of buyout firms for digital assets, the opportunity of Biden’s climate bill, a look at H1 European tech valuations
Dear all,
Welcome back from the summer break! The economy and the markets have only grown more challenging in recent months and investors – across all asset classes – must continue to adapt to this turbulence. The Fed is still in inflation-fighting mode, which means higher interest risks which in turns heightens the risk of a recession. But amidst this economic and geopolitical turmoil, the Private Markets continue to be transformed by Digitization, Decarbonization and Sustainability, which represent massive investment opportunities. If Digitization has been massively accelerated by Covid, Decarbonization and Sustainability are emerging as a priority in light of global warming and rising inequalities. More than a priority, an imperative.
However to understand the economic models that arise out of these three megatrends, whether for new tech or tech-enabled companies or for disrupted incumbents willing to embrace the necessary changes, new frameworks are needed. The rules that existed before are washed away, while new ones emerge to fully grasp the risks and opportunities of these assets, and assess their resilience. This new paradigm is an amazing opportunity that is bringing deep and welcome changes to the way we approach due diligence.
Growth Assets: New Opportunities, New Rules
As Digitization, Decarbonization and Sustainability reshape investment grids, private market investors are poised to make a disproportionate impact despite the uncertain context because they are free from short-term pressures. Hence the imperative to search for those businesses across all sectors of the economy, with strong economic fundamentals, who benefit from these megatrends and who are resilient enough to face the current headwinds spurred by the economic and geopolitical instability we are facing. We have chosen to label and to clearly distinguish those companies that fit these profiles “Growth Assets” because they we are convinced that they will deliver durable long-term growth and value for investors, even in uncertain times.
Private equity managers are entering the landscape of fast-evolving digital assets for potential deals aiming to be first movers in a vertical – that of Crypto + Blockchain – that is at the heart of tech innovation. Many experts expect that this trend will accelerate in the near term despite the “crypto winter” we faced this year in which cryptocurrency and other digital asset values plummeted. But buyout shops seeking digital asset deals may need to apply an unfamiliar investing lens. Our founder, Raphaëlle d’Ornano, gives her insights on the subject to FundFire reporter Tom Stabile.
US climate bill could change the weather | Financial Times
While most of us were on summer break, the US Congress – and President Joe Biden – pulled off the Inflation Reduction Act in what could potentially be the most important climate change bill in American history per the Financial Times. This article explores the long-terms significance of the bill. Despite the fact that Congress did not embrace a carbon tax, this is a significant move in the path to Net zero.
What Ethereum’s Big ‘Merge’ Means in Crypto Land | Financial Times
The development of the Crypto + Blockchain vertical raises many environmental issues. This could change with the upcoming merge of the current proof-of-work Ethereum blockchain and the proof-of-stake “Beacon Chain” created by Ethereum developers, mechanisms that cryptocurrency networks use to verify transactions and add them to the blockchain. The article explains how this change will work.
SPAC activity in July reached the lowest levels in five years | The Wall Street Journal
After taking the public markets by storm in 2021, SPACs are facing a reckoning. This article dives into recent SPAC activity and the all-time low reached in July 2022. So are SPAC’s still an attractive exit opportunity for private companies?
H1 European VC valuation trends in six charts | Pitchbook
This Pitchbook data presents European VC valuation trends over H1. Although figures are not as bad as what could have been anticipated, let’s keep in mind that a significant part of Q1 22 deals was done on the basis of end-of-year 2021 valuations, and as such the figures over H2 could reflect a deterioration.
Sézane
D’Ornano + Co. has advised Téthys Invest, the family office of the Bettencourt-Myers family (majority shareholder of L'Oréal), in its acquisition of a minority stake in Sézane, a well-known French digital native brand. Téthys Invest join General Atlantic, shareholder since 2018.
DualSun
D’Ornano + Co. has supported Tilt Capital Partners in a new round of financing of DualSun, developer of multi-energy solar panels designed to make buildings self-sufficient in energy.
L’Addition
D'Ornano+Co. has assisted La Française des Jeux (PAR: FDJ) in its acquisition of L’Addition, developer of point-of-sale software designed to record and manage bookings.
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