DWS dealflow grows 3x in the second half

DWS, which is understood to be in market with its debut fund, recently completed a deal involving Revelstoke Capital Partners portfolio company DataLink Software.

DWS has said dealflow in its “mid-life, mid-market” segment increased by 3x over the past six months.

The London-headquartered group has completed eight deals with a ninth set to close imminently, global head of private equity Mark McDonald told Secondaries Investor. Two transactions have completed since the onset of the covid-19 crisis with “several” others sourced during that time now in the late stages of due diligence.

“GPs are looking for ways to do more with their better-performing assets,” McDonald said.

Secondaries Investor reported in September last year that DWS had raised more than $200 million for Private Equity Solutions SCSP out of a  target of $500 million. State of Wisconsin Investment Board is an anchor investor in the fund.

In late November, DWS led a “significant growth investment” in DataLink Software, a portfolio company managed by Revelstoke Capital Partners. The deal is symbolic of DWS’s strategy, said head of Americas Kumber Husain.

Revelstoke, which had the chance to sell the business to a strategic buyer, believed there was greater return potential in holding onto it, according to Husain. DWS led a group that took a minority stake in DataLink, providing partial liquidity to Revelstoke while allowing it to keep the asset.

DWS targets portfolio companies that have typically been held for two-to-four years. The young age of the assets means the economics do not generally have to be reset, making the creation of a continuation vehicle unnecessary, Husain said.

Unlike buyout firms that acquire minority stakes in portfolio companies, DWS does not try to assert “meaningful control or influence” and instead acts more like a secondary limited partner, according to Husain.

“It’s an attractive and clean alternative to single-asset secondaries deals, full-blown restructurings, or a partial sale to a direct competitor,” he said.

McDonald joined DWS from the secondaries advisory unit of Credit Suisse to lead the build-out of the team in 2017. Husain joined in November 2018, following the appointment of Daniel Green as EMEA head of private equity in January the same year, Secondaries Investor reported.