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January 22, 2020 No Comments Author: Andy Jones

Private Equity Investments in Biotech Genomic Companies

Although much progress has been made in the last 30 years, the field of genetics is still an open frontier with much left to discover and learn.

In 1990, the quest to map the human genome was funded with $3 billion by the US Department of Energy and the National Institutes of Health. The project was expected to take 15 years. In an unusual twist – delivering a completed project before the deadline – the human genome was fully mapped by April 2003, two years early.

Since then, progress in the science and methodologies to map DNA has developed significantly, reducing the cost from billions to a few hundred dollars, making DNA mapping (or at least partial mapping) affordable to the general public.

This has given rise to notable B-2-C companies like Ancestry.com and 23andMe. In fact, the private equity firm Hendale Capital invested in 23andMe, a personal genomics and biotechnology company. 23andMe offers a proprietary FDA-approved genetic microarray test and web portal that helps consumers understand their health, genetic traits, and ancestry.

While most people are more familiar with these consumer facing companies that offer genomic testing, private equity firms have made more significant investments in portfolio companies involved in the field of rare genetic diseases, (sample transactions shown below).

January 10, 2020 No Comments Author: Andy Jones

Tariffs, Debt, Social Security and The Fed

I recently wrote some thoughts on the economy on my personal blog:

Economic Thoughts on Tariffs, Debt, Social Security and The Fed

I thought our audience here at PrivateEquityInfo.com would be interested as well.

QUICK SUMMARY

  1. Tariffs on Chinese goods could trigger an increase in interest rates for U.S. Treasuries (potentially inflation and a recession).
  2. The U.S. Debt load has garnered near unstoppable negative momentum and would be compounded by an increase in interest rates.
  3. Social Security concludes its final surplus year in 2019, applying further interest rate pressure on U.S. Treasuries.
  4. The Federal Reserve has considerably less maneuverability compared to 2008.
December 11, 2019 No Comments Author: Andy Jones

Schwab Acquisition of Ameritrade

Charles Schwab recently announced plans to acquire Ameritrade for $26 billion. The combined entity will have 24 million customer accounts holding ~$5 trillion assets.

While most people are familiar with Charles Schwab and Ameritrade for their enormous retail brokerage businesses, most do not know these firms also offer prime brokerage and custodial services to institutional investment funds.

Our research database tracks 53,711 institutional investment funds (hedge funds, private equity funds, venture capital funds, real estate funds, etc.). These funds often use third-party providers as prime brokers and custodians.

This data study reports on the prime brokerage and custodial services offered by Schwab and Ameritrade.

November 25, 2019 3 Comments Author: Andy Jones

Private Equity Investing in Senior Care

As a generational segment, Baby Boomers (now 55 – 75 years old), have a significant impact on the demographics of the U.S. population and on the markets that serve them.

US Population by Age_2019_11_21_1333

As this population segment ages, there is an expected increased demand for elderly care and related services. According to Morningstar, the average age of admittance into a nursing home is 79. With the oldest baby boomers currently at 75 years, coupled with a ~5-year median holding period for private equity portfolio companies, I thought we should see an increased investment appetite for elderly care operators and related service providers from private equity firms. As it turns out, we do.