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| The Daily Pitch |
| PE, VC and M&A |
| Your edge on global private capital markets |
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⚽ The World Cup begins today, all while sports are becoming a more prominent asset class for private market investors. See what position PE plays across Europe's soccer clubs in our PE football dashboard.
🚀 Plus... keep up with today's action via our SpaceX IPO live blog. |
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| The PE playbook that reformed accounting is coming for law firms |
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By Andrew Woodman, Managing Editor, European Private Markets
From accounting to healthcare, private equity has reshaped professional services through a proven buy-and-build playbook. Law firms were the last holdout—but not for much longer.
PE has spent years pouring billions of dollars into partnership-based professional services. Law firms were the last segment to largely resist outside capital—that is no longer the case.
This week, Morgan & Morgan became the latest law firm to flirt with outside investment, hiring JPMorgan to explore a minority stake sale that could raise more than $1 billion and pave the way for a public listing. It is the latest signal that a wave of outside capital that has been building in the legal sector has arrived.
Capital flowing into the legal market has almost doubled over the space of two years. PE deployed $5.1 billion into legal services companies globally in 2025, the highest annual total on record, according to PitchBook data, and up from $3.6 billion in 2023. Deal count reached 97 transactions last year, also a record. An increasing share is targeting law firms directly.
With 39 deals already recorded in the first five months of 2026, activity is tracking at a pace consistent with last year. |
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“Law is probably the last significant professional services sector that hasn’t taken material amounts of private capital investment,” said David Morley, a former senior partner at Allen & Overy, who co-founded his UK-based law firm advisory Dejonghe & Morley last year to advise PE groups making investments in the legal sector.
Morley notes that a significant consolidation opportunity still exists on both sides of the Atlantic. “In the UK, you’ve got 9,000 law firms. Nobody knows how many law firms there are in America, but it could be 400,000, many of them one-man bands. It’s a very fragmented industry,” he said.
However, the US has been slower to move, for structural reasons. Professional ethics rules prohibit non-lawyer ownership of law firms in most states, leaving investors to find another route: the management services organization—a structure that separates a law firm’s business operations from its legal practice, allowing outside capital to own the former without touching the latter.
The model is identical in principle to the alternative practice structure used by PE to enter accounting and, before that, healthcare and dentistry. Convincing law firms to use it has been another matter. |
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• VC funding for the infrastructure SaaS market came roaring back in Q1, driven by AI. Startups collected $17 billion across 218 deals—representing a quarter-over-quarter increase of 114% and 40%, respectively, according to our latest report on the sector.
• Parabilis Medicines has broken the record for the largest VC-backed biotech IPO, just weeks after Kailera Therapeutics took the crown. Read more
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| AI can do a lot, including slow down PE exits |
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| Berlin (Alexander Spatari/Getty Images) |
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By Emily Lai and Jessica Hamlin, PitchBook News
On a partially cloudy day in the center of Berlin, investors at SuperReturn International, a top conference for PE professionals, weighed AI's drawbacks against its long-term benefits. Some outlooks were sunny, others not so much.
Fundraising, operations of portfolio companies and even sports are set to shift dramatically. But the opportunity cost is longer exit timelines and lower net IRRs.
FTV Capital COO Karen Derr Gilbert told PitchBook that scrutiny from LPs now goes deeper than ascertaining which companies have deployed AI tools. They are asking whether businesses have the deep technical integration, proprietary data or embedded workflows that can't be easily replicated by AI.
That distinction is emerging as the central underwriting question.
Steffen Meister, of Partners Group, said the next 10 years will see an economic transformation brought about by the "reconfiguration" of what had been winning business models.
"The cards are completely reshuffled, and you want to be very careful who you believe is successful in this environment," he said.
GPs are taking the opportunity to add AI capabilities to their portfolio companies, which can take time. And time weighs on PE's favorite and most cited metric: net IRR.
Bain Capital bought House of HR in 2022, with plans to automate its formulaic process to match candidates with jobs. This means reducing headcount at a company that had over 57,000 employees when Bain purchased it.
"We're working on how to address some of that cost bar with agents, and that's taking time," said Bain partner Christophe Jacobs van Merlen. "We would like to prove out through that work that this is actually a net winner because I think right now it's too early to exit."
Talk of sports investing offered little respite from the AI chatter.
PE firms are pushing deeper into minor and professional leagues and the industries that keep them alive, betting on the lasting power of live events as something that can't be replaced with AI, according to Alastair Seaman, a partner with sports investment firm Arctos Partners. |
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• Tens of millions of Americans will own SpaceX stock whether they want to or not. Most index funds tracking the Nasdaq-100 will be required to add the company's stock due to rule changes Nasdaq made for the listing. [Bloomberg]
• Beijing's crackdown on offshore ownership structures is about to change how foreign VC firms invest in Chinese companies. After heavy scrutiny of foreign investors after the Meta-Manus deal, companies in China want to dismantle "red-chip" structures. [Financial Times]
• Even America's least populous state harbors negative feelings about data center development. Meet one couple whose views of grazing cattle turned into a front-row seat to construction on one of Meta's biggest data centers. [The Wall Street Journal] |
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| Since yesterday, the PitchBook Platform added: |
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619
Deals
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2376
People
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1144
Companies
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24
Funds
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| The Daily Benchmark: 2022 Vintage Global Secondaries Funds |
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Germany-based humanoid robotics startup Neura Robotics secured a $1.4 billion Series C led by stablecoin company Tether Holdings at a $7 billion valuation.
Ant International, a unit of Ant Group, is in talks to raise $1 billion from investors including General Atlantic and Silver Lake at a $10 billion valuation, Bloomberg reported.
TensorWave, which specializes in AI infrastructure, secured a $350 million Series B led by Magnetar and AMD Ventures.
Montreal-based mortgage financing platform developer Nesto raised a C$302 million Series E from investors including La Caisse, Fidelity Investments Canada and Picton Investments.
UK-based defense tech startup Cambridge Aerospace is in talks to raise a $300 million round led by DFJ Growth at a $3.5 billion valuation, Bloomberg reported.
Element Biosciences, the developer of research and diagnostic tools, secured a Series E, which includes a $175 million investment from Samsung Electronics.
Enterprise automation software developer Poetic raised a $50 million Series A led by Kleiner Perkins at a $500 million valuation.
Airco, which develops sustainable aircraft fuel, is looking to raise $40 million through convertible notes at an $800 million valuation, Axios reported.
Cybersecurity startup Pi raised $35 million in funding led by Brightmind Partners and Third Point Ventures.
Factory and warehouse automation startup Maneva secured a $27 million Series A led by US Venture Partners.
Rem3dy Health, the UK-based parent company of personalized nutrition brand Nourished, raised £14 million from investors including Future Planet Capital Regional, Suntory and Estrella Galicia. |
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UK-listed DCC, which focuses on clean energy, will accept a £5.7 billion buyout bid from KKR and Energy Capital Partners.
CameraMatics, a Dublin-based provider of fleet safety technology, secured an investment of up to €49 million from Blume Equity, Ireland Strategic Investment Fund and Goodbody Capital Partners.
BlueFive Capital acquired a 49% stake in LeasePlan Emirates, an Abu Dhabi-based leasing and fleet management company, from Ayvens.
HIG Capital-backed Coriant acquired Wescott, a UK-based industrial services provider.
Kainos Capital acquired landscaping specialist Super-Sod from Heartwood Partners.
Lewis & Clark Capital acquired air quality control companies Radon Mitigation Services and Radon Professional Services to form a new platform, AirCore Environmental.
Architect Equity acquired material handling-equipment provider Material Handling Exchange. |
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NSI Industries, an electrical products manufacturer backed by Sentinel Capital Partners, agreed to be acquired by NYSE-listed Hubbell for $3 billion.
Einride, a Stockholm-based autonomous vehicle specialist backed by EQT Ventures, will go public via a merger with a SPAC, Legato Merger Corp. III, at a $1.35 billion valuation.
Generic drug company Apotex, which is backed by SK Capital Partners, raised C$1.3 billion ($932 million) in its Toronto IPO.
Interplex, a Blackstone-backed communications technology specialist, agreed to be acquired by BizLink in an $850 million deal.
ERock, a modular power company backed by Energy Impact Partners, raised $600 million in its IPO.
KKR is exploring a sale of UK-based broadband provider Hyperoptic, the Financial Times reported.
Warburg Pincus hired bankers to sell London-based broadband company Community Fibre, the Financial Times reported.
Saleo, the developer of a sales demo-automation platform backed by Emergence Equity Management, agreed to be acquired by Consensus.
Kiavi, which offers a lending platform for real estate developers and is backed by Gore Creek Partners, agreed to be acquired by Nasdaq-listed Figure Technology Solutions.
F.lli Ferrari, an Italian maker of truck-mounted cranes and lifting equipment backed by Mutares, completed the partial sale of its Netherlands distribution business to HMF Group. |
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Ares Management closed on $8.5 billion across two vehicles: Ares Pathfinder Fund III and Ares Pathfinder Fund III (Offshore). |
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Loan pricing in the Morningstar LSTA US Leveraged Loan Index is signaling a six-month forward default rate of 1.86% as of November, up from 1.42% in May. The rate remains low in absolute terms, but the upward trajectory may be an early sign of stress in the leveraged loan market.
Source: PitchBook LCD Default Predictor
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