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White Rock Folds on Latest Energy Fund | Blackstone Gathers Capital Partners Fuel | Eyes on a Rail Deal
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Good Monday morning! We’re officially into the back half of summer, so enjoy it while it lasts. The blank-check parade just won’t quit, with 55 IPOs having raised $22.5 billion so far this year for buyout-focused special purpose acquisition companies, according to market-watcher SPAC Research. With five months left in 2020, that's already nearly double the total collected in 2019, and one thing we’ve noticed is that a number of the recently registered deals involve private-equity firms and/or their principals. We report on a couple more of this type below, including one involving activist investor Clifton Robbins. It may be that the IPO market’s buoyancy makes these vehicles attractive as potential exit routes while the private markets are hampered by the coronavirus pandemic. We'd be interested to hear alternative explanations.
But on to other matters. Luis Garcia has an exclusive look at a rare event: the demise of a private-equity fund as investors rescinded their commitments. Also, Isaac Taylor has pulled together news on Blackstone’s latest fundraising drive for its Strategic Capital arm, which will fuel investments in other fund managers. Finally, Miriam Gottfried and Cara Lombardo broke news on Friday that a huge deal could be in the works for Blackstone and Global Infrastructure Partners. For these and much more, please slide in...
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White Rock Oil & Gas has halted efforts to raise its third energy-focused fund after investors, including the University of Michigan, pulled back on their commitments, according to people familiar with the matter. PHOTO: LUCAS JACKSON / REUTERS
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White Rock Oil & Gas halted efforts to raise its third energy-focused fund earlier this year after the University of Michigan and other investors pulled back on their commitments, WSJ Pro Private Equity's Luis Garcia reports, citing people familiar with the matter. The Plano, Texas-based private-equity firm sought to raise $250 million to $400 million for its White Rock Oil & Gas Partners III LP vehicle, the people said. White Rock last year held a first close for the fund with $56 million in commitments, including $30 million from the University of Michigan’s endowment. But then endowment managers got cold feet.
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Blackstone Group and Global Infrastructure Partners are together exploring a takeover bid for railroad operator Kansas City Southern that could be worth more than $21 billion and mark a big bet on U.S.-Mexico trade, Cara Lombardo and Miriam Gottfried report for The Wall Street Journal. The firms are speaking to banks, including Citigroup, about financing, according to people familiar with the matter. There is no guarantee they will proceed with a formal offer or that publicly traded Kansas City Southern would be receptive. Assembling the roughly $15 billion equity check that could be required for a deal of that size would pose significant hurdles for Blackstone’s
infrastructure arm and GIP, which would invest out of $14 billion and $22 billion infrastructure funds, respectively.
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Blackstone Group has collected at least $3.5 billion so far in its latest Strategic Capital fundraising to back a strategy of investing in other private fund managers, WSJ Pro Private Equity's Isaac Taylor reports. The fund is expected to collect around $4 billion before wrapping up and will fuel a strategy that focuses on acquiring stakes in established alternative asset managers with proven track records and good reputations, according to a person familiar with the matter. The strategy calls for leveraging Blackstone’s purchasing power and expertise in selecting asset managers to back.
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$69 Trillion
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The amount of aggregate spending needed to support global infrastructure needs through 2035, according to UBS analysts.
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Neiman Marcus transferred the thriving MyTheresa online unit to a parent holding company controlled by Neiman’s private-equity owners that had no obligation to service or repay the retailer’s $5 billion in debt. PHOTO: PAUL HENNESSY / ZUMA PRESS
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Neiman Marcus Group Ltd.’s private-equity backers agreed to relinquish part of the MyTheresa online business they took over in 2018, clinching a settlement with creditors and clearing a big hurdle for the bankrupt department-store chain’s exit from chapter 11, Soma Biswas reported for WSJ Pro Bankruptcy. Ares Management Corp. and the Canada Pension Plan Investment Board, which own Neiman Marcus, agreed to hand over up to $162 million in shares of the MyTheresa business under a proposed settlement with unsecured creditors.
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KKR & Co. has agreed to buy a majority stake in Spanish vocational training company Master Distancia SA, which does business as MasterD. The company in Zaragoza offers more than 280 skills-building and certification courses to people in Spain and Portugal, with an annual enrollment of roughly 50,000 for the mostly online sessions, according to a news release. The company also offers in-person classes in 36 locations. KKR is investing in the business through its global impact fund.
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Private-equity firm Stanley Capital has acquired Dublin-based pharmaceuticals company Noden Pharma from PDL BioPharma, Elisângela Mendonça reports for sister publication Private Equity News in London. The total value of the transaction, set to close in August, will result in payments to PDL of as much as $48.2 million in cash, the company said in a statement. Noden focuses on acquiring prescription medicines across a broad range of therapeutic areas in international markets.
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Our add-on deal interactive tool allows you to sort and analyze volumes of add-on deal data compiled by WSJ Pro. View more.
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Investor Clifton Robbins has found his next act, apparently. He’s leading a blank-check acquisition company looking to raise $300 million to acquire a business that meets particular characteristics, according to a regulatory filing on Friday. CSR Acquisition Corp. is sponsored by the family office that Mr. Robbins turned to earlier this year after winding down his Blue Harbour Group hedge fund, which ended 2019 with about $2 billion in assets. The SPAC said in its filing that Mr. Robbins intends to devote
his attention full-time to the company. A previous general partner of KKR & Co. and managing member of General Atlantic, Mr. Robbins didn’t identify any specific target sectors for investment.
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A blank-check company sponsored by biopharmaceutical investment firm Boxer Capital aims to raise $125 million to purchase and take public a private biotechnology company, a regulatory filing shows. BCTG Acquisition Corp., the special purpose acquisition company, is led by Boxer co-founders Aaron Davis as chairman and chief executive and Christopher Fuglesang as president. The SPAC cites the buoyant market for biotech companies, noting that 29 had successful initial public offerings of shares this year through mid-July, raising $4.8 billion despite the coronavirus pandemic. Started in 2005 and backed by the Tavistock Group family office,
Boxer manages more than $2.2 billion in assets through its funds.
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A blank-check company tied to CC Capital and Neuberger Berman, CC Neuberger Principal Holdings II, is raising $720 million through an initial public offering of shares that priced Friday at $10 each, according to a news release. The amount is 20% more than listed by the company when it registered for an IPO on July 15, a regulatory filing shows. The special purpose acquisition company is led by CC Capital executives and is backed by a Koch Industries affiliate though a Neuberger Berman fund. Chinh Chu, CC Capital founder and senior managing partner, is the blank-check company’s chief executive. At CC Capital, Mr. Chu led the $7.2 billion
deal to take Dun & Bradstreet private in February 2019. Mr. Chu previously spent 25 years at Blackstone Group Inc., where he was a senior managing director until 2015. An earlier SPAC he formed, Collier Creek, agreed to acquire potato chip maker Utz Brands Inc. in June.
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Baird Capital has set a $350 million goal for its second global fund, a regulatory filing shows. The fund, Baird Capital Global Fund II LP, has not yet held its first close. The firm’s predecessor fund closed with $310 million in 2017. Milwaukee-based Baird is the direct-investment arm of investment bank Robert W. Baird & Co., and makes venture, growth and private-equity investments. It closed its fifth venture fund earlier this year with $215 million.
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U.K. private-equity firm Vitruvian Partners has closed its fourth buyout fund at its hard cap of €4 billion ($4.71 billion), less than three months after marketing began, sister publication Private Equity News in London reported. The firm said the vehicle, VIP IV, is 40% larger than its predecessor, which closed in June 2017 at €2.4 billion. The new fund will follow the same investment strategy of supporting high growth companies in the middle market, primarily in Europe.
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Caisse de dépôt et placement du Québec has named Marc-André Blanchard, Canada’s ambassador to the United Nations, to the new position of executive vice president and head of CDPQ Global, overseeing the Montreal-based asset manager's offices outside Canada, effective Sept. 8. Mr. Blanchard will lead the new unit with newly named deputy head of global Anita George, who was executive vice president, strategic partnerships-growth at the firm. A lawyer, Mr. Blanchard has served Canada at the UN since 2016. Previously, he was chairman and chief executive of the McCarthy Tétrault LLC law firm in Toronto. CDPQ manages mainly public pension fund assets, which totaled 340.1 billion Canadian dollars ($255.07 billion) at the end of last year.
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Lake Street Advisors founder Greg Van Slyke plans to retire as a partner in the firm at the end of the year. Mr. Van Slyke co-founded the Portsmouth, N.H.-based firm in 2003 and has helped it grow to 33 employees, including five partners, managing more than $2.5 billion in assets for 64 client families.
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Boston firm Great Hill Partners has added Ian Drysdale as an executive in residence focusing on deals in the financial technology, payments and software sectors. Mr. Drysdale has previously worked for payments companies First Data, WorldPay, Heartland Payments and Zelis Payments, among others.
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Paris-based asset manager Triago has hired Andrew Rosato and Simeon “Sim” Ketchum as partner and principal, respectively, in New York. Mr. Rosato joined from placement agent MVision, where he was a senior director, and Mr. Ketchum comes aboard from Astor Place Holdings, where he was head of capital formation and investor relations.
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A financial technology company backed by Warburg Pincus and Rise Fund has cleared a key hurdle in its attempt to become a national bank, Orla McCaffrey reports for The Wall Street Journal. Varo Money Inc. said Friday it had received a charter from the Office of the Comptroller of the Currency giving the startup the ability to make loans and safeguard deposits across state lines.
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President Trump will require Beijing-based Beijing Bytedance Technology Co. to sell its ownership in TikTok, the popular video-sharing app that U.S. officials have deemed a national security risk, Katy Stech Ferek reports for The Wall Street Journal, citing a person familiar with the matter. At the same time, the Journal reported that Microsoft Corp. is in talks to acquire the U.S. operations of TikTok. U.S. private equity firms have reportedly been weighing bids for the operation, with Reuters saying one contemplated proposal would value TikTok at $50 billion.
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Multi-line private-equity firm Kayne Anderson Capital Advisors is pushing into the retail investment industry with its newly created Kayne Anderson Renewable Infrastructure Fund. The firm with more than $30 billion in assets under management said the open-ended mutual fund would provide investors with daily liquidity while investing in companies involved in the renewable energy industry. The Los Angeles firm’s private markets strategies include infrastructure, real estate and credit in addition to private equity.
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Tikehau Capital is on track to reach its target of €35 billion ($41.21 billion) in assets under management by 2022, despite difficult and volatile market conditions in the first half of 2020, Elisângela Mendonça reports for sister publication Private Equity News in London. Year-on-year, the alternative asset manager increased its assets under management by 10% to €25.7 billion. The rise was mainly driven by the firm's private-equity and real estate arms, which increased their AUM since December 2019 by 14% to €2.5 billion and 4% to €9.6 billion, respectively. The two asset classes accounted for around 80% net new money over the six month period, the firm said.
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Indigo Partners-backed Frontier Airlines is preparing to notify workers that 35% of the budget carrier’s flight attendants and pilots face furloughs as early as Oct. 1, a spokeswoman told Reuters on Friday. The warning would follow a similar advisory sent out by low-cost carrier Spirit Airlines earlier last week as government funds to help U.S. airlines protect pay and jobs during the coronavirus pandemic is set to expire in September, with no near-term recovery in sight.
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