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Alaska's Moseley Sets Sail | Stellus Banks $950 Million | Fraud Charged at Pre-IPO Investor StraightPath
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Good day. The dry powder mountain held by North America-focused managers rose to a record last year as Preqin reports, but as a proportion of overall assets, that undeployed cash shrank to a new low of 28%, led by private-equity firms as they raked in hundreds of billions for new funds. Preqin said the proportion of dry powder among North America-focused funds reached its lowest level since it began tracking the data in 2002. The last time that margin narrowed significantly followed the financial crisis years, dropping below 30% of total assets in 2011 and into 2012, Preqin said. The timeframes provide food for thought.
As for fundraising, our Chris Cumming reports that Stellus Capital has amassed $950 million across a new credit fund and a private business development company, giving it about $1.8 billion of investment power when anticipated leverage is included. On the people front, our Preeti Singh reports that alternative investments head Steve Moseley is leaving state sovereign wealth manager Alaska Permanent Fund Corp. next month, heading for a new position in New York. And finally, I report on the SEC's fraud allegations concerning StraightPath Venture Partners, which pitched thousands of individual investors on the chance to get into pre-IPO stocks, raising more than $410 million.
We have these stories and many more condensed and linked for you below, so please read on...
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Downtown Houston, near where Stellus Capital is based. PHOTO: CALLAGHAN O'HARE / BLOOMBERG NEWS
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Stellus Capital Management has about $1.8 billion available to deploy following the closing of a new fund and the launch of a new private business-development company, Chris Cumming reports for WSJ Pro Private Equity, citing the Houston-based direct lender. The firm raised about $725 million for Stellus Credit Fund III LP and its related vehicles, and it collected an anchor investment of $225 million for its first private BDC, called Stellus Private Credit BDC. Both vehicles will invest following the same strategy, and Stellus intends to use leverage to bring the total amount of capital that they have available to lend to about $1.8 billion, the firm said.
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Steve Moseley, head of the alternative investment program at Alaska Permanent Fund Corp., is leaving the state sovereign-wealth fund to start a new job. Preeti Singh reports for WSJ Pro Private Equity. Mr. Moseley, who is also deputy chief investment officer, will leave the fund in June after nearly 8½ years, according to an email viewed by WSJ Pro Private Equity. Mr. Moseley said in the email that he plans to return to New York and that he will continue to help manage assets for the Permanent Fund, but didn’t elaborate.
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A self-described “boutique private equity firm” and four people who allegedly ran it face civil fraud allegations from the Securities and Exchange Commission over the handling of more than $410 million raised from at least 2,200 investors, Ted Bunker writes for WSJ Pro Private Equity, citing court documents. StraightPath Venture Partners LLC, now based in Jupiter, Fla., allegedly made “Ponzi scheme-like payments” to cover transactions and distributions from the commingled assets across nine funds that the firm said would be used to acquire equity shares in private companies at the pre-initial public offering stage, the SEC said. Lawyers for the defendants didn’t respond to a request for comment.
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$1.85 Trillion
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The amount of dry powder, or undeployed cash, held by North America-focused private assets managers at the end of September, a record level according to data provider Preqin Ltd.
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A 2018 print edition of Popular Science, which became a fully digital publication. PHOTO: DENNIZN/ALAMY
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Blackstone Inc. led a $300 million investment in digital media company Recurrent Ventures Inc., marking one of the biggest investments in online publishing in recent years, Alexandra Bruell reports for The Wall Street Journal. Founded in 2018 by Andrew Perlman and Matt Sechrest, North Equity managing partners, the Miami-based company focuses on developing audiences for advertisers through acquisitions of properties such as Field & Stream, BobVila.com and Popular Science. Blackstone is backing the company through its Tactical Opportunities strategy.
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KKR & Co. is offering to take private wholesale power generating company ContourGlobal PLC in a deal valued by the company at about £1.75 billion, or $2.14 billion, according to a regulatory filing in London. The 263.6 pence per share offer represents a 36% premium to the stock’s closing price on Monday, the last trading day before the deal was disclosed. The London-based company has operations in 20 countries with total generating capacity of 6.3 gigawatts and include thermal and renewable-source plants.
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Temasek Holdings led a $160 million investment in banking technology company Thought Machine Group Ltd., joined by existing backers that include Eurazeo in a deal that values the business at $2.7 billion, according to a news release. The London-based company’s value roughly doubled since the previous investment round, which concluded late last year.
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Eldridge Industries and Norwest Venture Partners are leading a $400 million investment in talent management technology company Velocity Global LLC, joining existing backer FFL Partners, which supported an earlier investment in the company. The latest investment increases the Denver-based company’s valuation sevenfold since the same time last year and puts it in the multibillion dollar range, according to a press release.
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Vista Equity Partners’ credit arm is backing software company Updater Inc. through a $215 million investment, according to an emailed news release. The New York-based company’s software is used to make the process of moving a residence more efficient for all parties connected with the move, including brokers, property managers, services suppliers and others.
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Mithril Capital Management led a $110 million growth investment in robotics software company Grey Orange Pte. Ltd., joined by existing and other new investors and along with separate funding provided by BlackRock Inc., according to a news release. The company’s programs are used to expedite shipping and order fulfillment by retailers such as Walmart Inc.
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KKR & Co. made a majority investment in customer experience software provider Alchemer. Financial terms weren’t disclosed. Alchemer is the first investment for KKR Ascendant, and Alchemer will put in place KKR’s employee ownership program.
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General Atlantic led a $108 million investment in European digital payments company Modulr Finance Ltd., joined by other investors that included Blenheim Chalcot Management and Frog Capital, according to a news release. The fresh capital is expected to fuel the London-based company’s expansion.
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Antin Infrastructure Partners is acquiring a controlling stake in electric vehicle charging station company Power Dot SA, according to a news release. The Lisbon-based company operates about 5,000 charging points across the Iberian Peninsula, France, Belgium, Luxembourg and Poland, constructed through partnerships with retail chains, shipping centers and fleet operators. Reuters reported that the deal was worth €150 million, equivalent to about $158.3 million, citing Antin and Power Dot.
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Ardian has made a growth investment in tax-compliance software provider Taxually Korlátolt Felelősségű Társaság, according to an emailed news release. Founded in Budapest, the company’s products are used to manage and automate value-added tax returns by e-commerce companies in more than 40 countries.
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Decarbonization-focused Ara Partners in Houston is backing battery recycling company Blue Whale Materials LLC, committing up to $80 million to support the construction of more than five lithium-ion battery recycling plants in the U.S. and Europe, according to a news release. Washington-based Blue Whale’s systems process spent batteries to extract materials used in manufacturing new cells.
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Family office Parabellum Investments has acquired fashion retailer Hervia, its first deal involving a luxury goods company, according to a news release. The firm founded and led by Rami Cassis bought the business from founder Oscar Pinto-Hervia, who remains an investor and the company’s chief executive.
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Morgan Stanley Capital Partners has backed Fairway Lawns, a provider of residential lawn care services based in Little Rock, Ark. The company operates across the U.S. Southeast from 16 locations.
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Growth investor PSG Equity in Boston is backing cybersecurity software company Qmulos LLC, according to an emailed news release. The Chantilly, Va.-based company supplies automated security compliance systems for federal agencies and contractors.
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CS Capital in China led a $61 million investment in gene therapy developer Laekna Inc., joined by Worldstar, Infinity Capital and existing backer Yanchuang Capital, according to a news release. The Shanghai-based company is focused on developing treatments for cancer and liver disease.
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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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PAI Partners has agreed to sell specialty chemicals company Perstorp Holding AB in Sweden to Petronas Chemicals Group Berhad for €2.3 billion, the equivalent of $2.43 billion, on a cash and debt-free basis, according to an emailed news release. The company has seven plants and roughly 1,500 employees developing and manufacturing sustainable materials for use in resins, coatings, engineered fluids and animal feed. Paris-based PAI first backed the company in October 2018, according to its website.
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Sonae Investment Management has agreed to sell Maxive Cybersecurity, a holding company that includes consulting firms S21sec and Excellium, to French defense technology company Thales SA at an enterprise value of €120 million, or roughly $126.6 million. The two operating consulting businesses generated about €59 million in sales last year.
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HealthQuest Capital has raised $675 million for a new growth-equity fund targeting the expanding ecosystem of later-stage healthcare startups, Brain Gormley reports for WSJ Pro Venture Capital. HealthQuest set out to raise $550 million for HealthQuest Partners IV LP late last year and closed the fund at its upper limit, founder and Managing Partner Garheng Kong said. HealthQuest, founded in 2013, raised $440 million for its previous fund in 2019.
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Venture investor Realterm Transportation has collected $610 million for a fund to invest in startups and properties that facilitate the movement of freight through the nation's supply chain, Marc Vartabedian reports for WSJ Pro Venture Capital. The Annapolis, Md.-based firm started fundraising for the vehicle in last year's fourth quarter.
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Lightrock in London has closed on $300 million for a Latin America-focused growth investment fund as part of a drive to step up dealmaking in the region, according to a news release. The fund is anchored by LGT Group, a European financial institution with $295 billion in assets under management. Lightrock also plans to offer co-investment alongside the fund’s deals, bringing deployable assets to more than $400 million.
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GreenPoint Partners has raised $134 million for its debut technology fund for real asset, technology and sustainability investments, according to an emailed news release. The newly established firm founded and led by Chris Green in New York also said it has made its first investment through its real estate strategy, backing last-mile company Infinium Logistics in the U.K.
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Denver-based private-equity firm Rallyday Partners said it is hiring Brian Knight as a senior adviser to help the firm strengthen the culture and leadership capabilities across its portfolio companies. Mr. Knight has held a number of leadership roles throughout his career, including as co-founder and chief executive of Genesis Research, a Rallyday Partners portfolio company, according to a news release.
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Angeles Equity Partners in Santa Monica, Calif., has hired Te'Rhon O'Neal and Jamie Brown as vice presidents, according to an emailed news release. Mr. O'Neal joins from Westhook Capital while Mr. Brown was previously with Stonepeak Infrastructure Partners in New York and London.
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Grafine Partners, an alternative asset firm that backs experienced investment managers that are starting their first private-equity funds, has hired Christine Winslow as a managing director at the firm. Ms. Winslow previously served as director of private equity for Dutch pension fund manager PGGM, according to a press release.
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Shares of startups taken public by SPAC creators such as venture capitalist Chamath Palihapitiya have been battered during the stock market’s selloff. PHOTO: MARK KAUZLARICH / BLOOMBERG NEWS
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An investor stampede out of risky trades is squeezing SPACs that are running out of time to find companies to take public, potentially leaving their architects without deals and saddled with sizable losses, Amrith Ramkumar reports for The Wall Street Journal. Firms that have gone public through mergers with special-purpose acquisition companies have tumbled lately alongside the technology sector and cryptocurrencies. Supply-chain disruptions and technological setbacks have hurt many startups, combining with worries about high inflation and rising interest rates.
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U.S. stocks fell sharply Wednesday, with two of the major indexes suffering their worst day since 2020, as the latest set of disappointing earnings from large retailers raised recession fears, Orla McCaffrey and Caitlin Ostroff report for The Wall Street Journal. The results are prompting Wall Street to wrestle anew with the idea that the global economy could be headed for a prolonged slump. Though that debate is far from settled, it has rattled stocks and other risky assets throughout the year, with the latest data illustrating the degree to which inflation has hit U.S. consumers.
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Melvin Capital plans to close its funds and return cash to its investors, capping a stunning reversal for a firm that lost big on the surge in meme stocks in the early days of the pandemic, Juliet Chung reports for The Wall Street Journal. Melvin had been, until last year, one of the top-performing hedge funds in the industry.
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A group of Republican senators is looking to curtail the power big asset managers like BlackRock Inc., State Street Corp. and Vanguard Group have over public companies, Angel Au-Yeung reports for The Wall Street Journal. Collectively, those three firms alone manage $20 trillion in assets. In a bill introduced Wednesday, Sen. Dan Sullivan (R., Alaska) calls for voting choice to be made available to individual investors in passive funds when money managers own more than 1% of a company’s voting securities.
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