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Veritas Capital Raises $1.8 Billion | Mass PRIM Steps Up Diversity Push | EnCap Fund Collects $1.2 Billion
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Good morning. Today we have a fundraising stories from WSJ Pro's Laura Cooper, who writes about Veritas Capital’s first vehicle dedicated to investing in midmarket companies, and Luis Garcia, who reports on the first fund raised by EnCap Investments to focus on renewable-energy projects. And our Preeti Singh takes a look at the $90.1 billion Massachusetts pension trust that is developing a plan to raise its commitments to diverse and emerging managers.
But that ain’t the half of it, as they say. We also have reports from The Wall Street Journal’s Maureen Farrell on serial SPAC creator Alec Gores of the Gores Group, from Miriam Gottfried on Apollo’s earnings and from Allison Prang on KKR’s first-quarter results. Meanwhile, Chris Wack of Dow Jones Newswires has a look at a take-private proposal for China’s 51job recruitment company that has a reported deal value of $5.33 billion. And last but certainly not least, Anne Kadet writes in the Journal about Slice founder and CEO Ilir Sela, a Yugoslavian immigrant who one investor marvels “took scrappiness to a whole new level.” These and many more stories are summarized for you below, so please take a bite on us...
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Veritas Capital, based in New York’s Solow Building on West 57 Street, pictured above, has raised a $1.8 billion fund to back smaller companies. PHOTO: CLAUDIO PAPAPIETRO FOR THE WALL STREET JOURNAL
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Veritas Capital, a private-equity firm focused on investments in companies at the intersection of technology and government, has closed its first stand-alone midmarket-focused fund, collecting some $1.8 billion, Laura Cooper writes for WSJ Pro Private Equity. The Veritas Capital Vantage Fund reached its hard cap after just two months of fundraising, according to the firm. It follows New York-based Veritas’s closing of its $400 million maiden credit fund last fall and brings the firm’s assets under management to more than $28
billion, Veritas said.
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Massachusetts's largest state pension manager is creating a program to increase engagement with diverse emerging managers while stepping up reporting requirements on diversity and inclusion for current investment managers, Preeti Singh writes for WSJ Pro Private Equity. The goal of the $90.1 billion Massachusetts Pension Reserves Investment Management Board will be to commit at least 20% of its investment capital to diverse investment managers, based on racial, ethnic, gender and disability measures. The planned program was outlined at a public meeting Tuesday.
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EnCap Investments raised $1.2 billion for its first fund dedicated to renewable-energy project developers, securing nearly two-thirds of the capital in the past six months, Luis Garcia reports for WSJ Pro Private Equity. The firm is applying an investment strategy it has used in the oil-and-gas sector to energy assets that help foster a transition to a low carbon economy, including solar power and battery storage.
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2.4%
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The first-quarter default rate among senior secured and unitranche private loans, down from an 8.1% peak in the second quarter of 2020, as measured by the Proskauer Credit Default Index, a quarterly index developed by international law firm Proskauer Rose
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Job hunters scan a bulletin board for openings. PHOTO: LAM YIK FEI / GETTY IMAGES
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Shares of 51job Inc. rose after the Chinese company said it had received a preliminary nonbinding buyout proposal from private-equity firms DCP Services Ltd. and Ocean Link Partners Ltd. along with the company’s chief executive, Rick Yan, Chris Wack reports for Dow Jones Newswires. The group indicated it wanted to take the recruiting company private for $79.05 per share in cash, updating a previous proposal it floated in September. Reuters said the proposal has a deal value of about $5.33 billion. The company’s U.S. shares gained about 11% in Tuesday’s trading.
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One Equity Partners has agreed to acquire the North American operations of Fluor Corp.'s Ameco business for $73 million. Ameco provides construction equipment, scaffolding, small tool and site management services.
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CVC Capital Partners has acquired a majority stake in healthcare company Icario Inc. The Minneapolis company uses proprietary technology and analytics to connect people to healthcare providers and insurers. The private-equity firm invested through its CVC Growth Partners II fund.
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Caisse de dépôt et placement du Québec and CVC Capital Partners have agreed to buy a majority interest in the BlueFocus International subsidiary of Chinese advertising, public relations and marketing company BlueFocus Intelligent Communication Group. The operation the investors are acquiring is based in Quebec City and houses several groups, including units based in San Francisco and London, with more than 2,500 employees in 12 countries.
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ORIX Capital Partners has acquired a majority interest in marketing company Optimad Media LLC. The Irvine, Calif.-based company serves packaged goods producers and film and entertainment businesses with proprietary technology.
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Altamont Capital Partners has agreed to buy the Intermix women’s fashions unit of Gap Inc. The deal includes store leases, e-commerce sites and assets, the San Francisco-based retailer said.
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Kelso & Co. has acquired a majority stake in family-owned packaging distributor C.L. Smith Co. and plans to combine it with portfolio company Inmark LLC in Atlanta. Seller Nancy Smith reinvested in the St. Louis-based company as well.
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Private growth investment firm Spring Mountain Capital led a $10 million investment in software-as-a-service provider Thentia Corp., investing alongside BDC Capital. The Toronto-based company’s programs are designed to help government agencies manage the licensing process. Thentia said it plans to use the fresh capital to finance expansion in the U.S. Spring Mountain invested from its SMC Growth Capital Partners III fund.
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Bain Capital’s real estate arm, joined by Bardas Investment Group, is committing $450 million to develop a five-acre site in Los Angeles as Echelon Studios. Plans for the site in the Hollywood area include four 19,000-square-foot sound stages, a 15,000-square-foot flex stage and two midrise office buildings with 350,000-square-feet of combined space, according to an emailed news release.
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Riverside Co. is backing residential services provider Radiant Plumbing and Air Conditioning Inc., according to an emailed news release. The Austin, Texas-based company serves nearly 12,000 customers annually in the Austin area.
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Durable Capital Partners led a $155 million investment in business services provider HoneyBook Inc., joined by Tiger Global Management, Battery Ventures, Zeev Ventures and 01 Advisors. The San Francisco-based company provides project management, bookkeeping and billing services to support freelance or contract-based workers.
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Devonshire Investors, the private-equity affiliate of Fidelity Investments parent FMR LLC, led a $95 million investment in onsite-power company Mainspring Energy Inc. Based in Menlo Park, Calif., Mainspring produces linear generators that provide electricity at work locations such as data centers, military bases and industrial sites. Others investing alongside Devonshire included Princeville Capital, 40 North Ventures and Chevron Technology Ventures.
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Rock Mountain Capital has acquired a majority stake in insect-repellant company VCM Products LLC, investing alongside the founders. The Freehold, N.J.-based company’s products include bed-bug glue traps and related items under the BuggyBeds brand.
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Triton Pacific Capital Partners is adding physician practice Genesis Healthcare Partners to its newly created Urology Partners of America services group. Genesis has 34 doctors and 14 advanced practitioners in its San Diego area organization, making it one of the largest urology practices on the West Coast.
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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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Alec Gores wants to build out a broader-based company that will raise SPACs in more categories. JENNELLE FONG FOR THE WALL STREET JOURNAL
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Alec Gores says his firm is “building a franchise” in the blank-check business. Speaking with The Wall Street Journal’s Maureen Farrell, the founder of the Gores Group discusses his strategy when creating special purpose acquisition companies and de-SPACing them through deals. He speaks from experience, as he has set up 13 SPACs since creating his first in 2015.
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Hims & Hers Health Inc., which recently went public via an Oaktree Capital Management-backed blank-check company, plans to restate results for the past two years to reflect a change in the treatment of warrants issued to special purpose acquisition company investors. Citing staff guidance on accounting for warrants from the Securities and Exchange Commission last month, the company said the change is expected to create a noncash expense of less than $5 million for the first quarter and a $30 million to $35 million warrant liability as of the end of March. The San Francisco-based consumer products company said the restatements wouldn’t change its historical results but only
consolidated annual financial reports since the formation of Oak Acquisition Corp. in June 2019. Hims & Hers combined with the SPAC in January.
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Correction: An item about the combination of Dyal Capital Partners with Owl Rock Capital through the Altimar Acquisition Corp. special purpose acquisition company misstated the ticker the resulting enterprise will trade under on the New York Stock Exchange, should the deal close. The resulting company will trade under the OWL ticker, not the SPAC’s ticker of ATAC, as reported in Tuesday’s newsletter.
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Aurora Capital Partners has acquired software provider Grace Hill from fellow private-equity firm Stone Point Capital LLC. Grace Hill offers performance management software to the real estate market, including multifamily property operators, affordable housing managers and commercial office owners and managers. Stone Point originally acquired the Greenville, S.C.-based company in 2018.
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Abry Partners and Castik Capital have agreed to acquire human resources technology company Reward Gateway UK Ltd. from Great Hill Partners. The London-based software-as-a-service company has more than 1,900 clients with roughly 5 million employees, providing in-house communications services concerning recognition, discount programs, surveys and benefits options. Great Hill first backed the company in August 2015.
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Blue Wolf Capital Partners has sold Mulch and Soil Co. in Fort Myers, Fla. Blue Wolf carved the fertilized lawn and garden products maker out of Suwanee Lumber Co. in 2018.
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Blackstone Group Inc. has hired Paget MacColl as head of institutional client solutions for the firm’s alternative asset management arm. She joins from Goldman Sachs Group Inc.’s asset management group, where she was co-head of the Americas institutional client business.
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Midmarket firm Olympus Partners has elevated Manu Bettegowda to managing partner. Mr. Bettegowda has been with the firm since 1998 and became a partner in 2005.
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Charlesbank Capital Partners has promoted John Flannery to managing director and co-lead of its portfolio resources group. He joined the Boston firm in 2019 from General Electric Co., where he rose to chairman and chief executive.
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Impact investment firm Lafayette Square has named Ommeed Sathe as head of strategy to lead thematic impact investment strategies for the firm. Mr. Sathe previously headed the impact investment unit at insurer Prudential Financial Inc., according to a press release.
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Balance Point Capital Advisors has hired Seth Tutlis as a managing director, joining from Harvest Capital Credit, as well as two new associates, Rory Cunnane and Emily Dang. The Westport, Conn. firm also promoted Elliot Hambrecht to senior associate and said its recently closed fourth flagship fund brought its assets under management to about $1.5 billion.
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Slice founder and CEO Ilir Sela walks through his childhood neighborhood on New York's Staten Island, where his parents lived after arriving in America when he was a boy, and where he still resides. PHOTO: ANNA WATTS FOR THE WALL STREET JOURNAL.
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Private equity-backed MyPizza Technologies Inc., which does business as Slice, provides an unusual story of a Yugoslavian immigrant who bootstrapped his way to success, as Anne Kadet writes in The Wall Street Journal. Ilir Sela, the founder and chief executive, started the company on New York’s Staten Island. “He took scrappiness to a whole new level,” says Ben Sun, co-founder and general partner at Primary Venture Partners, which joined Cross Creek Capital and other investors in a $40 million investment in the business last month.
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Companies including BlackRock Inc. have issued nearly $240 billion of debt with special rules that reward them with lower borrowing costs—or penalize them with higher ones—depending on if they meet self-made targets for things such as cutting carbon emissions, or for getting more women on boards, Paul J. Davies writes in The Wall Street Journal, citing figures from Dealogic. That nearly doubles the total issuance of such debt over the previous three years. The deluge of debt comes as borrowers are using financial carrots and sticks to improve their performance on things such as the environment and boardroom diversity.
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Apollo Global Management Inc.'s assets climbed to $461.1 billion in the first quarter, up from $455.5 billion in the prior period and $315.5 billion from the year earlier quarter, Miriam Gottfried reports in the Journal. The New York firm reported a first-quarter profit as the value of its investments soared. Net income reached $678.9 million, or $2.81 a share, compared with a year-earlier loss of $996.2 million, or $4.47 a share as the coronavirus pandemic affected investment values. Apollo’s private-equity portfolio appreciated 22% during the quarter.
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KKR & Co.’s assets under management surged 77% to $367 billion by the end of the first quarter, including $15 billion in new capital raised and $98 billion through the acquisition of Global Atlantic, the New York firm reported. KKR said it has about $69 billion in undeployed commitments, or dry powder to invest. The firm said its private-equity holdings produced a 19% gross return in the just-ended quarter. The firm posted a profit before accounting for preferred stock dividends of $1.67 billion compared with a loss of $1.28 billion a year earlier, Allison Prang reported for the Journal.
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Litigation finance specialist Delta Capital Partners Management is expanding into India, forming GARC India for asset recovery and lawsuits in the country. Members of GARC India include consulting firms and law firms as well as Delta Capital.
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Oil and gas investment and operating firm EnerVest Ltd. plans to cut 111 jobs from its Houston offices, a notice to state authorities indicates. The notice, received by the Texas Workforce Commission on Friday, says the action will take effect on June 28. Bloomberg News reported on the cuts earlier, saying the firm was taking steps to right-size its operations, according to a spokeswoman.
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