Welcome back  The S&P 500 closed down on Wednesday as a tech-stock selloff stretched into another day. I spoke with Scott Twibell, global co-head of technology at midmarket investment bank Lincoln International, who called the public markets’ reaction overblown, adding that the bank’s private capital markets data show strong growth and solid credit profiles for software businesses. The idea that software would be easily replaced by AI is hard to believe, Twibell said, adding that “these are not things that can be ripped out of organizations overnight.” Software remains a big area of interest for private equity, he said, adding that questions around AI are not new, but as the market has evolved, so have the proofpoints to justify valuations. 

AI takes center stage in today's top stories. First, infrastructure investor Brookfield is doubling down on its AI bet, saying that it sees AI as fuel for growth, not decline.

And tech investor Riverwood Capital is acquiring Urban SDK, betting that AI will supercharge how cities respond to such things as natural disasters and traffic snarls.

We have these and more. Read on…

Brookfield Asset Management’s newly appointed chief executive downplayed concerns about the effects of artificial intelligence on the holdings of the infrastructure-focused firm, saying that rising demand for data centers and power plants helps its business, Luis Garcia and Robb M. Stewart report. Connor Teskey, named as successor to long-serving CEO Bruce Flatt, said he expects to expand Brookfield “around the mega trends shaping the backbone of the global economy” during a conference call Wednesday to discuss fourth-quarter results with analysts.

Technology investor Riverwood Capital is backing software company Urban SDK, betting that artificial intelligence will supercharge how smaller cities respond to such things as natural disasters and traffic snarls, Maria Armental reports for WSJ Pro. The $65 million growth investment gives Riverwood a majority stake in the Jacksonville, Fla., company and will help expand customer reach and product offerings, increasingly using AI agents, said Urban SDK co-founders Drew Messer and Justin Dennis.

Sequoia Capital led a $500 million growth investment in artificial intelligence voice technology startup ElevenLabs, valuing the company at $11 billion. Other investors that participated in the deal include Iconiq Capital and Bond Capital. The company began marketing its voice-generation software in 2022 only to face lawsuits and backlash over impersonators using its software, Kate Clark reports for the Journal. More recently it has established creative partnerships with movie stars.

Software specialist Thoma Bravo has completed the acquisition of publicly traded Dayforce for about $12.3 billion. The $70 a share cash deal was disclosed in August by the Minneapolis-based provider of personnel management applications. Shareholders voted for the deal late last year.

Valor Equity Partners and Atreides Management with Alphabet's CapitalG co-led a $270 million growth commitment to construction technology developer Bedrock Robotics. The company is designing autonomous machines as well as vehicle fleets for the industry, which faces a widening labor gap.

Arena Private Wealth in Chicago and Unless Management in Boulder, Colo., along with Jump Trading led a $230 million growth investment in Positron AI in a transaction that valued the company at more than $1 billion. Other participants included the Qatar Investment Authority, Valor Equity Partners and Atreides Management. The company is developing custom-designed chips and an artificial intelligence inference system that are expected to lower the cost of AI technology.

Growth investor B Capital and Prelude Ventures led a $102 million commitment to home battery storage systems developer Lunar Energy. The Mountain View, Calif., company was founded by Kunal Girotra, former head of Tesla Energy.

Crosspoint Capital Partners has provided $100 million to back SynthBee, a developer of software designed to foster collaboration to accelerate innovation.

Blockchain Capital led a $70 million growth investment in TRM Labs in a transaction that valued the business at $1 billion. Other participants included Thoma Bravo. The cryptocurrency-focused company builds AI solutions to disrupt criminal networks and counter national security threats and works with law enforcement and national security agencies as well as banks, payment services providers and credit card issuers.

Neuberger Berman has acquired a minority stake in a collection of European warehouses held by HighBrook Investors, investing through its real estate secondaries strategy. The 23 sites are part of a series of last-mile properties that stretches from the Netherlands to Germany and Denmark. Law firm Simpson Thacher & Bartlett advised New York-based Neuberger Berman on the transaction.

Lightyear Capital in New York is acquiring mobile parking payments company PayByPhone through a carve-out from New York-listed Corpay. The company works with more than 1,300 municipalities and facility operators to collect parking fees.

Antin Infrastructure Partners in Paris is acquiring shipyard operator Vigor Marine Group from Lone Star Funds, investing through its Flagship Fund V. The Portland, Ore.-based company operates from five locations including in San Diego and Norfolk, Va., and generated revenue of about $1 billion in 2024. Lone Star acquired the business in 2023, according to the Dallas firm's website.

Goldman Sachs' alternatives arm is backing academic and mental health services provider LearnWell, with a commitment from the bank's sustainable investing strategy. The company works with more than 7,700 school districts and has over 250 educators on its staff.

Pictet Group's alternatives arm is investing in German cybersecurity company QGroup. The firm is investing through its direct private equity strategy.

Rhône Group has completed the acquisitions of Invacare Holdings and Direct Healthcare Group and combined them to form medical device company DHCare, based in London. The company specializes in mobility and post-acute care equipment.

Ventus Industrial Partners along with GenNx360 Capital Partners and family office Admiralty Partners has formed Aeron Defense through the combination of acquired business General Tool with Magna Machine, which Ohio-based General Tool is buying. Both companies were founded by the Kramer family, one of whose members runs General Tool.

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

Wendel Group is selling specialty coatings maker Stahl to strategic buyer Henkel at an enterprise value of about €2.1 billion, or $2.48 billion, in a deal that will deliver net proceeds of about €1.2 billion, Aimee Look reports for the Journal. Wendel first backed the business in 2006 and invested at least €225 million in the operation, according to the French investment firm's website. Over the two decades of its ownership, Wendel has received €427 million in dividends and loan repayments from the company. Wendel currently owns almost 69% of Stahl's equity.

Mill Point Capital has sold information technology services provider Verinext to strategic buyer Arctiq. 

SK Capital Partners-backed Valtris Specialty Chemicals has completed the sale of its Champlor Renewables rapeseed crushing business in Baleycourt, France, to Avril Industrie. The operation processes around 400,000 tons of seed annually to produce biodiesel fuel. SK Capital acquired Independence, Ohio-based Valtris in 2022.

Chicago-based Shore Capital Partners has raised more than $400 million for Shore Capital Industrial Partners Fund II to back investments in lower midmarket industrial companies.

Secondaries focused Timber Bay Partners in Cincinnati has collected $281 million for its third fund for investing in general partner-led deals. The firm manages about $1.1 billion and targets lower midmarket investments.

Alternatives firm CAZ Investments in Houston has set up an interval fund for eligible investors that will specialize in acquiring stakes in fund management firms. The CAZ GP Stakes Fund offers daily subscriptions, quarterly redemption opportunities and doesn't charge performance fees.

AE Industrial Partners in Boca Raton, Fla., has promoted Jon Lusczakoski to partner as one of a number of promotions that also saw Tess Sprechman move up to managing director, head of investor relations, and Megan LeFevre to head of human resources. Among other moves, the firm also named Matthew Friendly as general counsel and chief compliance officer.

The recent software selloff is about more than just stocks, Sam Goldfarb reports for the Journal, citing PitchBook data. Prices of software company loans have also been sliding in recent days–a significant development because software has a heavy presence in the sub-investment grade loan market. Some $25 billion of software loans were trading at distressed levels–below 80 cents on the dollar–at the end of January, up from $11 billion a month earlier.

Private-credit firms, like private-equity managers, have long used opacity to their advantage, but have seen it quickly turn to a liability, Jonathan Weil reports for the Journal. Fear over the outlook for software companies swept through the markets this week after Anthropic unveiled new artificial-intelligence tools to automate tasks for lawyers such as contract reviews and legal briefs. Those concerns spread to some of the loan books managed by private markets firms, which are often weighted heavily to software makers and pay interest rates befitting junk credits. So when fear suddenly gripped the markets over a gloomy narrative about the software industry’s future, dumping shares of alternative-asset managers made sense.

Josh Harris, the founder of investment firm 26North Partners and a co-founder of Apollo Global Management, is concerned about the way private-markets products are being pitched to individual investors, Miriam Gottfried reports for the Journal. “It’s not going to end well,” Harris said at a Journal event Tuesday. “Many of the retail investors don’t understand the duration. They don’t understand that these new structures aren’t liquid.” He also warned that the design of funds set up to attract wealthy investors means their returns suffer when lots of fresh cash pours in and needs to be invested quickly.

Tikehau Capital in Paris is joining forces with TotalEnergies to invest in the development of electric-vehicle charging infrastructure in Belgium and the Netherlands. Tikehau and TotalEnergies each own half of the venture, which includes current TotalEnergies projects either in development or operation in the region. TotalEnergies already operates over 27,500 charge points in the two countries.

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Maria Armental; Ted Bunker; Chris Cumming; Luis Garcia; Laura Kreutzer; Isaac Taylor; Chitra Vemuri.