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S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.

Private equity appears to be steering clear of the troubled commercial real estate sector.

Investments backed by private equity (PE) and venture capital in the sector totaled $3.51 billion in 39 deals globally between Jan. 1 and May 22, nearly a full five months. By comparison, in the first three months of 2022, investments totaled $6.30 billion across 79 deals.

What is holding private equity back? Questions about the future of the US office market are a large part of the answer. Blackstone Inc. CEO Stephen Schwartzman said during the company's first-quarter earnings call in April that US office vacancies were at all-time highs, causing investor sentiment toward the sector to turn "quite negative."

Ares Management Corp. CEO Michael Arougheti offered a similar assessment, describing the US office market as "severely challenged," not just by vacancy rates but also the higher interest rates that are adding stress on property owners. And the fallout is just starting.

"That market is going to have to go through a pretty significant period of repricing and deleveraging," Arougheti said.

Read more about recent private equity investment trends in the commercial real estate sector.

CHART OF THE WEEK: Apollo's Arconic deal powers surging metals and mining investments

One mega-deal is boosting private equity- and venture capital-backed investments in global metals and mining businesses to their highest quarterly total since at least 2020, according to S&P Global Market Intelligence data.

Alternative asset manager Apollo Global Management Inc. partnered with Irenic Capital Management LP, a hedge fund sponsor, on a $4.57 billion proposed buyout for Arconic Corp., a provider of aluminum products to the aerospace, transportation and construction industries.

On the strength of that single deal, private equity and venture capital investments in the metals and mining sector in the first five months of 2023 have already surpassed full-year total transaction values from four of the previous five years in the analysis.

TOP DEALS AND FUNDRAISING

Blackstone Inc. completed the acquisition of a majority interest in Copeland LP, formerly Emerson Climate Technologies, from Emerson Electric Co. for an upfront payment of about $9.7 billion. The deal values the refrigeration and heating, ventilation and air conditioning business at $14 billion.

The Carlyle Group Inc. will buy Meopta-optika, a Czech company specializing in industrial and handheld optical, optomechanical and optoelectronic solutions. Carlyle expects to close the deal later in 2023, subject to customary regulatory approvals.

Funds managed by Apollo affiliates agreed to acquire United Living Group Ltd. in a deal expected to close over the summer. The target company provides essential infrastructure, social housing maintenance and construction services in the UK.

Adams Street Partners LLC secured capital commitments of more than $3.2 billion for its secondaries investment program, including the close of its Global Secondary Fund 7.

MIDDLE-MARKET HIGHLIGHTS

Gyrus Capital SA will buy German healthcare equipment company LRE Medical GmbH from AIS Global, a KPS Capital Partners LP portfolio company. The deal is scheduled to close in the third quarter.

Vector Capital signed a deal to acquire IT solutions provider Riverbed Technology Inc., whose lenders will provide it with a new credit facility at deal closing.

IK Partners is providing capital to the Linxea-Irbis Group, pending regulatory approval. Linxea is an online platform for savings product distribution in France, and Irbis develops structured products distributed through a network of financial advisers, private banks and institutions.

SGT Capital LLC agreed to buy Elatec GmbH, a German developer of secure physical and digital access solutions, from Summit Partners LP.

FOCUS ON: HEALTHCARE

Trinity Hunt Partners LP bought a majority stake in Centricity Research, which provides clinical research services across more than 40 therapeutic areas.

Ardian invested in Mon Veto, a French independent network of veterinary clinics, to help the group's development in France and Europe.

Aurelius Growth Investments SARL bought a stake in Physiotherapy Christian Frei GmbH, a provider of physiotherapy, occupational therapy and logotherapy services. The German company operates eight locations in the greater Nuremberg region.

For further private equity deals, read our latest In Play report, which looks at potential private equity-backed M&A, including rumored transactions, each week.

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PE backs off real estate; single deal powers metals and mining ... - S&P Global