From The Loadstar, April 1:
Private equity firms have made a series of notable investments to boost their exposure to the global logistics sector over the past year.
This has entailed deploying capital not only into physical real estate – such as Blackstone’s acquisition of a £473m portfolio of UK warehouses in October, helping the firm to grow its holdings of logistics space to more than 1 billion sq ft globally – but also into the thriving ecosystem of businesses that manage and facilitate global supply chains.
Having invested in Ligentia, a UK-based global supply chain management provider, in February, we see a combination of drivers behind the rising tide of private equity capital flowing into the sector. They include its evident growth potential, the structure of the market and the demand for equity funding to finance capex spending.
Consumer and geopolitical tailwinds
While the migration towards online shopping has been underway for years, the pandemic has dramatically accelerated this trend. Now finding themselves competing in crowded categories for increasingly discerning and expectant buyers, vendors are clamouring for efficient logistics and are increasingly prepared to pay more to secure services.
It is a well-worn cliché that the people who make money during a gold rush are the ones selling the shovels. From controlling warehouse floor space to understanding how to deliver supply chain efficiencies, logistics companies provide the tools by which global e-commerce functions. The result of this is an industry now valued at c.£310bn globally and anticipated to grow at c.5% CAGR until 2025. Private equity has been quick to recognise the return potential implied by these sector fundamentals....
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