It is an easier ride when the partner is a pension fund or sovereign wealth fund with similar long-term investment horizons as corporates. Aligning on the objectives, sources of value creation and exit path with a PE partner, however, are better resolved before the deal is inked. It can be a worthwhile effort, as a PE partner can structure and close the deal faster for the corporate partner as well as provide validation for the investment-all while sharing the financial risk. While the corporate–financial sponsor marriage makes sense on paper, these partnerships are structurally complex. In another such deal, Suez partnered with CDPQ, a pension fund, to acquire GE Water for $3.4 billion in 2017.įor an example of coinvestment in new technologies, Volkswagen, BMW, Goldman Sachs Capital Partners and other investors made a $1 billion coinvestment in Northvolt, Europe’s biggest lithium-ion battery plant. This coinvestment deal will provide Merlin with the long-term investment it needs to execute on its growth plans. enabling a separation of operational and infrastructure assets.Īs an example of financial support, consider how LEGO, through its owner Kirkbi (single-family office for the Kristiansen family), partnered with US PE firm Blackstone and the Canada Pension Plan Investment Board to acquire a majority of UK theme park operator Merlin Entertainments for $5.7 billion.a path to a two-step exit for PE firms and.partnerships to provide local anchoring in new markets.coinvestment in new technologies or emerging business models.short- and long-term financial support.The complementary offerings are fueling a steady flow of coinvestments with a variety of objectives: For their part, corporates bring strong industry knowledge and experience. Financial sponsors generally have better transaction capabilities-finding deals, providing validation given their strong diligence capabilities, and structuring and closing deals. Emerging partnerships but not yet a blissful unionĬash-rich financial sponsors offer a source of capital and risk sharing for corporates.

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