Private equity persistence is the theory that a firm's future returns can be predicted by its past returns. But persistence is declining, and it could threaten the entire asset class.
Why persistence matters: Limited partners in private equity funds are asked to invest in blind pools, so persistence gives them greater confidence. Particularly if they are new to the asset class. Moreover, persistence enables industry growth, as top performers are able to raise larger and larger funds.
What's new: MIT economist Antoinette Schoar, whose early aughts research helped popularize persistence, recently presented preliminary data that shows persistence is declining, particularly in terms of top-quartile performance. Here's the top-line, fund-over-fund, data:
Schoar says that her final data should be published within the next two months.
• "Founder friendly" update: The Wing, an all-women co-working and social club, this morning announced that it has raised an undisclosed amount of Series B funding from WeWork.
• Brexit: New York-based buyout firm CCMP Capital will shutter its London office next year, telling Axios that it is "sharpening its focus on businesses that are based in North America." No word yet on if any of the London staffers, such as managing director Thomas Walker, will relocate.
• Antitrust ripple: FanDuel co-founder Nigel Eccles has stepped down as the fantasy sports company's chairman and CEO, in order to launch an e-sports startup.
Eccles actually began planning the e-sports venture when FanDuel was in the midst of merging with DraftKings, after which he would have become chairman of the combined entity (with DraftKings boss Jason Robins serving as CEO). But then federal regulators successfully blocked the merger, leaving Eccles in a tricky position. So tricky, in fact, that he lied to his own internal PR rep about the e-sports effort when Axios inquired last month. He also didn't inform his board, which struck the departure agreement late last week.
The U.S. Department of Justice yesterday filed suit to block AT&T's proposed $85 billion takeover of Time Warner, claiming that the deal would increase prices for consumers and decrease competition in the streaming video market.
• TuSimple, a Chinese maker of autonomous truck software company backed by Nvidia, has raised $55 million in Series C funding. Fuhe Capital led, and was joined by existing shareholders Sina Corp. and Zhiping Capital. http://axios.link/0TSF
• Locus Robotics, a Wilmington, Mass.-based developer of autonomous mobile robots for use in e-commerce fulfillment warehouses, has raised $25 million in Series B funding led by Scale Venture Partners. http://axios.link/satY
• Pixvana, a Seattle-based mixed reality production platform, has raised $14 million in Series A funding. Vulcan Capital led, and was joined by Raine Ventures, Microsoft Ventures, Cisco Investments, Hearst Ventures and return backer Madrona Venture Group. http://axios.link/wb3p
• Peanut, a London-based community app for new mothers, has raised. Sweet Capital Investments and Female Founders Fund co-led, and were joined by Greycroft Partners, Sound Ventures, NEA, Felix and Partech International. http://axios.link/s9sU
• Ardian has agreed to acquire Revere Plastics Systems, a Clyde, Ohio-based designer and manufacturer of plastic injection molded parts, from Revere Industries, an Indiana-based portfolio company of Tennenbaum Capital Partners. http://axios.link/ffiq
🚑 Avista Capital Partners has acquired Miraca Life Sciences, an Irving, Texas-based anatomic pathology lab operator, from Miraca Holdings (Tokyo: 4544). www.miracalifesciences.com
• The Carlyle Group has acquired Benefit Mall, a Dallas-based employee benefits and payroll firm, from Austin Ventures. http://axios.link/JQuP
• DexKo Global, an Elkhart, Ind.-based portfolio company of KPS Capital Partners, has agreed to acquire Henderson Wheel & Trailer Supply, a Salt Lake City-based manufacturer of sprung and torsion axles and fenders. www.dexteraxle.com
• EQT Partners has agreed to acquire around a 40% stake in Epidemic Sound, a Swedish company that licenses music to television, digital video and other content creators. http://axios.link/x808
• GSR Capital is among the possible bidders for a 32% stake in Chilean lithium producer SQM, which is being divested by Potash Corp of Saskatchewan (NYSE: POT), per Reuters. http://axios.link/XrAW
🚑 SK Capital has completed its previously-announced acquisition of the active pharma ingredients unit of Perrigo Co. (NYSE: PRGO) for $110 million, and renamed the business Wavelength Pharmaceuticals. http://axios.link/7uzv
• Surge Private Equity has acquired Busy Bee Cleaning, a New York-based provider of commercial janitorial services. www.surgepe.com
• Warburg Pincus has launched a tender offer to acquire more than 31 million shares in Cyren (Nasdaq: CYRN), a McLean, Va.-based cybersecurity-as-a-service company, at $2.50 per share. This could increase its ownership to around 75%, following its recent purchase of a 21.3% position via a private placement. www.cyren.com
• Washington Equity Partners has invested in Arc Drilling, a Cleveland-based provider of electrical discharge machining solutions to the industrial gas turbine and aerospace engine markets. www.arcdrilling.com
🍣 Bain Capital plans to divest its remaining 19.8% stake in Japanese restaurant chain Skylark (Tokyo: 3197) via a $562 million block trade. http://axios.link/K3xW
• Affinion Group Holdings has hired Morgan Stanley to help it find a buyer for its accidental death and dismemberment business, which could be worth around $700 million, according to Reuters. http://axios.link/amWS
• DMM, a Japanese e-commerce company, has agreed to buy Japanese pawn shop app Cash for around $62.2 million. http://axios.link/fnNr
• Kabbage, an Atlanta-based lending platform for individuals and small businesses, has secured a $200 million revolving credit facility from Credit Suisse. Kabbage earlier this year raised $250 million in Series F equity funding from SoftBank. http://axios.link/Fl6n
• Jana Partners disclosed an 8.7% stake in Outback Steakhouse owner Bloomin' Brands (Nasdaq: BLMN), making it the restaurant company's second-largest shareholder. http://axios.link/2BHQ
🚑 LivaNova (Nasdaq: LIVN) has agreed to acquire the cardiac rhythm management unit to joint venture partner Microport Scientific (HK: 00853) for $190 million in cash. http://axios.link/RTzL
• Nestle is among several companies exploring a takeover offer for Hain Celestial Group (Nasdaq: HAIN), a Lake Success, N.Y.-based organic food and beverage maker, per Bloomberg. The report boosted Hain Celestial shares, giving it a market cap of around $4.4 billion. http://axios.link/2PLB
• Starboard Value has amassed a 10.7% stake in Mellanox Technologies Ltd. (Nasdaq: MLNX), and wants the semiconductor company to explore a possible sale. http://axios.link/60Gw
• Mark Danchak has joined WorldQuant Ventures as a managing director. He previously was a partner with Carbon6 Ventures. www.worldquantventures.com
• John Swainson has joined Siris Capital Group as an executive partner. He is the former CEO of Computer Associates who most recently was president of software at Dell. www.siris.com
• Janet Yellen will leave the Federal Reserve's board once her term as chairwoman expires in Feb. 3, 2018. That would leave just three members of the 7-person board, two of whom once worked for The Carlyle Group. http://axios.link/n8wA
We created this chart yesterday morning, when Tencent became Asia's first $500 billion company — and was approaching Facebook's market cap. Today, Tencent's market cap surpassed that of Facebook.