Happy Friday! Earlier this week, The Wall Street Journal reported that Apollo Global Management founder Leon Black requested the firm conduct an independent investigation into his business ties with the disgraced financier Jeffrey Epstein. The move followed a New York Times report that said Mr. Black had paid Mr. Epstein at least $50 million in the years after Mr. Epstein was convicted in 2008 of soliciting prostitution from a teenage girl. 

One group of investors paying close attention as the investigation unfolds is Apollo’s public pension backers. At least one of those funds, the Pennsylvania Public School Employees’ Retirement System, said it would halt commitments to future Apollo funds, as Preeti Singh writes this morning. Several other pension backers say they are closely monitoring the situation, although none have gone so far as to say they will halt future commitments.

Meanwhile, David Swensen, veteran chief of the Yale University endowment and a pioneer in endowment management, wants to see more progress among the endowment’s U.S. money managers on cultivating gender and racial diversity among their teams. And Goldman Sachs is clawing back tens of millions of dollars in compensation from top executives after agreeing to a costly settlement with the U.S. government over violations in anti-corruption laws related to its dealings with Malaysian investment fund 1MDB.

Read on for more on these and other stories...

Several pension backers of Apollo Global Management have expressed concern after new reports of financial ties between Leon Black, the firm’s co-founder, and the late Jeffrey Epstein, who committed suicide while awaiting trial on sex-trafficking charges, WSJ Pro’s Preeti Singh reports. One of the firm’s pension backers, the Pennsylvania Public School Employees Retirement System, said it would halt commitments to future Apollo funds.

David Swensen, longtime head of Yale University’s more than $30 billion endowment, sent a letter to U.S. money managers in the endowment’s portfolio putting them on notice that they would be measured on their progress toward increasing representation of women and minorities among their investment ranks, Juliet Chung and Dawn Lim write for the Journal. Mr. Swensen said the university's own investment office would be working to improve diversity within its own ranks as well.

Goldman Sachs Group Inc. is seizing tens of millions of dollars from top executives after agreeing to a costly settlement to resolve multiple government investigations into its role in a Malaysian bribery scandal, Liz Hoffman writes for the Journal. The Wall Street firm will recoup money from Chief Executive David Solomon, his predecessor Lloyd Blankfein, and other current and former executives, people familiar with the matter said, as it prepares to admit to compliance lapses in its dealings with a corrupt Malaysian investment fund, known as 1MDB.

Midmarket companies are facing a highly uncertain outlook, with the world economy undergoing massive disruption as a result of the coronavirus pandemic, the potential of marked policy changes after the U.S. elections, and escalating trade and political disputes with China. Join WSJ Pro Private Equity for a free virtual event on The Path Forward for the Middle Market on Nov. 16 from 11 am to noon Eastern Time. Register to participate here.

A changing clean-energy market is creating the need for new ways to fund projects in the sector—and private-capital firms have taken notice.

These firms are backing businesses that have adopted models outside of traditional equity and debt investments to finance clean-energy and energy-efficiency projects. In one such deal, Apollo Global Management said it expects to invest as much as $200 million in royalty-financing company Great Bay Renewables Inc.  Read more in Garcia’s Take.

Madison Dearborn Partners has invested in education technology company Carnegie Learning Inc., acquiring a majority stake in the Pittsburgh-based company from CIP Capital. CIP retained a minority interest in the company, which it first backed in 2018.

CORE Industrial Partners has acquired baked goods ingredients supplier J&K Ingredients Corp., whose products include a natural mold inhibitor and a fruit-based replacement for sorbic acid and potassium sorbate. The family-owned and led business was founded in 1899 and is based in Paterson, N.J.

Special situations private-equity firm Alchemy Partners has acquired a controlling stake in U.K. retailer Countrywide PLC, buying almost 66.7 million shares at 135 pence each, or £90 million (about $116.5 million) in a deal that gives it a 50.1% to 67.7% stake in the business, according to a regulatory filing in London.

Levine Leichtman Capital Partners has acquired two companies from First Dutch Innovations. One, Ducares BV, is a food and feed testing company that also does business as Triskelion. Based outside Amsterdam in Utrecht, the company also provides analytical services targeting nutrient residue and genetically modified organisms. The Beverly Hills, Calif.-based firm also acquired NMi Certin BV from First Dutch. The Delft, Netherlands-based company provides services to inspect and certify measuring devices and systems. Both deals were done through the Levine Leichtman Capital Partners Europe II fund.

London-based Oakley Capital is set to acquire the consumer health-care company WindStar Medical from ProSiebenSat.1 for an enterprise value of €280 million (the equivalent of $331.2 million), Elisângela Mendonça writes for sister publication Private Equity News.

HarbourVest Partners has acquired a stake in education technology company Finalsite, joining majority owner Bridge Growth Partners in backing the Glastonbury, Conn.-based business. Finalsite provides an internet-based communications system to help primary and secondary schools connect with students and parents. Bridge Growth Partners acquired the company in September 2016.

Health care-focused Havencrest Capital Management has acquired temperature management device maker ThermoTek Inc. The Flower Mound, Texas-based company’s products include cold compression devices used by post-orthopedic surgery patients and cooling units for industrial applications.

SER Capital Partners has acquired three lithium-ion battery projects in Texas with a total supply capacity of about 30 megawatts from developer HGP. SER Capital also entered a partnership with battery supplier LG Chem Ltd. to ensure its supply of environmentally sustainable and low-cost equipment.

Bain Capital Life Sciences and RA Capital Management are among participants in a $107 million Series A financing round to set up gene therapy developer AavantiBio Inc. The company is developing a treatment targeting Friedreich's Ataxia, a rare disorder that affects the heart and nervous system, based on work by founders Barry Byrne and Manuela Corti at the University of Florida, according to a news release. Participants in the funding also include health-care specialist Perceptive Advisors and Sarepta Therapeutics Inc., which invested $15 million.

Our add-on deal interactive tool allows you to sort and analyze volumes of add-on deal data compiled by WSJ Pro. View more.

Asset-light used car dealer CarLotz Inc. plans to go public through a buyout by blank-check company Acamar Partners Acquisition Corp., in a deal that values the company at $827 million, Dave Sebastian reports for Dow Jones Newswires. The deal reflects 0.88 times CarLotz's expected revenue and 6.8 times expected gross earnings for fiscal 2022, according to a regulatory filing on Thursday. Founded in 2011, the Richmond, Va.-based company’s consignment sales model cuts costs for buyers and increases prices for sellers and enables it to operate without the need for significant capital, the companies said. Acamar is funding the deal with roughly $311 million raised through a February 2019 initial public offering and a $125 million private investment in public equity, or PIPE transaction, with investors that include Fidelity Management & Research Co., KAR Global, McLarty Diversified Holdings and TRP Capital Partners. Acamar’s chairman, Juan Carlos Torres Carretero, is a former Advent International managing partner.

McAfee Corp., the cybersecurity software company backed by private-equity firms TPG and Thoma Bravo, said its initial public offering of 37 million shares priced at $20 apiece, toward the lower end of expectations, Colin Kellaher reports for Dow Jones Newswires. The San Jose, Calif.-based company had expected the shares to price between $19 and $22. After the offering, TPG, Thoma Bravo and Intel Corp. will control about 82.2% of the voting power in the company.

Private-equity backed Leslie's Inc. Thursday said it expects to sell 30 million shares at between $14 and $16 apiece in its initial public offering, Colin Kellaher writes for Dow Jones Newswires. At the $15 midpoint of that range, the Phoenix-based pool and spa-care company said it expects net proceeds of about $410 million. Leslie's is currently owned by consumer-focused firm L Catterton and Singapore sovereign-wealth fund GIC. The company said an entity controlled by L Catterton is offering an additional 10 million shares, bringing the total size of the IPO to 40 million shares. In a filing with the U.S. Securities and Exchange Commission, Leslie's said it would have roughly 186.6 million shares outstanding after the IPO and private placements, for a valuation of about $2.8 billion at the $15-a-share midpoint. Leslie's said affiliates of L Catterton and an affiliate of GIC will still own a nearly 79% stake after the offering.

Goldman Sachs Group Inc.’s private capital investment group and Bregal Sagemount have agreed to sell business software company Information Builders Inc. to strategic buyer TIBCO Software Inc., a Vista Equity Partners portfolio company. Based in New York, IBI provides applications for data management and analytics. Tibco, which is located in Palo Alto, Calif., said the acquisition would add to its enterprise data product menu. Bregal and Goldman initially invested in the company in May 2017. Vista acquired Tibco in December 2014.

Lazard has hired two senior managing directors as the independent investment bank launched a new unit for its U.K. arm, Paul Clarke reports in sister publication Private Equity News. The New York firm has acquired a new business called Makinson Cowell, bringing in senior bankers Bob Cowell and Howard Coates to lead it. The division will focus on offering capital markets and investor relations advice. Makinson Cowell has been running independently since 1989, and works with U.K. companies in the FTSE 100 and 250.

Vista Equity Partners founder Robert Smith, who last week admitted to evading $43 million in taxes, has given $50 million to the Student Freedom Initiative, a charitable group that works with students at minority-serving institutions. Mr. Smith is chairman of the group. Last year, he pledged to pay the student debt of the 2019 graduating class from Morehouse College, an historically Black school. In addition to financial assistance, the group provides paid internships and mentoring services.

Alvarez & Marsal said it has hired Luigi “Lou” Peluso as a managing director in the firm’s private-equity performance group to focus on aerospace, defense and aviation. Mr. Peluso previously worked with Alix Partners, Ingersoll Rand and the Danaher Corp. Mr. Peluso’s appointment follows the July hire of Managing Director James Marceau to the senior leadership of the aerospace, defense and aviation practice.

Impact investing firm TriLinc Global Advisors has approved Origin Capital Ltd. as a trade finance subadvisor for Latin America and Africa. The move is expected to broaden the Manhattan Beach, Calif.-based firm’s reach in both regions as well as in Southeast Asia and Eastern Europe. The firm and its subadvisors have deployed more than $43 billion in investments in small to midsize enterprises.

More than half of the 784 investment professionals who responded to a Heidrick & Struggles survey said they had received an increase in base salary this year, roughly in line with last year, despite the spreading coronavirus pandemic and resulting disruptions. However, 40% of those who got raises said they were for 10% or less. Bonuses, which often exceed base pay, are typically awarded in December. The survey showed that the one-time payments increased last year for fewer than two-thirds of respondents, at 64%, compared with 77% the year before.

Investors are pumping billions of dollars into biotechnology startups and paying skyrocketing prices for their stakes in the most-promising new drug companies, Brian Gormley writes for WSJ Pro Venture Capital. U.S. biotechs rounded up $19.5 billion in venture capital through Sept. 30, topping the $17.4 billion they raised for all of 2019, according to PitchBook Data Inc. and the National Venture Capital Association. This year is on track to double the $12.9 billion that biotechs collected in 2017.

Wall Street profit soared in the first half of this year despite the disruptions stemming from the coronavirus pandemic, New York State Comptroller Tom DiNapoli reported Thursday. Pretax gains surged 82% to $27.6 billion for the period compared with the first six months of 2019, and nearly surpassed the $28.1 billion profit for the full year of 2019. The results are drawn from the roughly 120 broker-dealers that are members of the New York Stock Exchange. But he said Wall Street jobs are declining this year, with a projected loss of 7,300 positions

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