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CDPQ Bleeds Talent in Europe | Connecticut Pension Eyes Private Debt | OceanSound's First Deals
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Good day! It's the Friday before a long weekend here for many of us in the U.S. as we prepare to celebrate the Martin Luther King Jr. holiday.
In the world of private equity, the talent crunch continues for institutional investors trying to attract and retain investment staff. One of Canada's largest pension investors seems to be feeling the effects of that talent war, as Will Louch reports this morning.
Meanwhile, Connecticut's pension system is adding private credit to the growing list of asset classes it wants to include in its portfolio, and our newest reporter Preeti Singh has the deets.
Finally, emerging manager OceanSound Partners has announced its first two deals.
Please note: We won't publish a newsletter on Monday. We will be back after the holiday on Tuesday, Jan. 21.
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CDPQ manages assets for public pensions, parapublic insurance groups and other depositors across the Canadian province of Quebec. PHOTOt: YVES HERMAN/REUTERS
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Deal executives leave Canadian pension. One of Canada’s largest public pension funds, Caisse de dépôt et placement du Québec, is feeling the talent squeeze. As WSJ Pro Private Equity's Will Louch reports, the pension system has recently lost at least two senior executives from its direct deal team in Europe, the latest in a string of departures.
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Connecticut jumps on private-credit bandwagon. Connecticut’s $37 billion public pension fund wants to invest in a new asset class as a way of diversifying its portfolio, Preeit Singh writes for WSJ Pro. The Connecticut Retirement Plans and Trust Funds will add private credit as a stand-alone asset class to its portfolio under a proposed investment policy for the new year from State Treasurer Shawn Wooden. The duties of the Nutmeg State’s treasurer include investing the pension’s assets.
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Dispatch From the J.P. Morgan Conference
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John Hennegan, founding member, Shore Capital Partners PHOTO: SHORE CAPITAL PARTNERS
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WSJ Pro's Laura Cooper, who attended the J.P. Morgan health-care conference this week in San Francisco, sat down with John Hennegan, founding member of health-care focused midmarket firm Shore Capital Partners.
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Q:
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How will the 2020 U.S. election affect the way you invest in health care?
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A:
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At Shore Capital, we focus on sectors that we believe deliver value regardless of administration or economic climate, so I don’t see a huge threat. Even Medicare for all would require scale to address reduced reimbursement and increased administrative burdens. If that happened, we’d be well positioned to aggregate the thousands of small health-care providers that exist today.
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Q:
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What health-care investment themes do you find most attractive in 2020 and why?
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A:
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We believe the U.S. is in the early stages of an awakening when it comes to behavioral health. Providers are now educated to look for signs leading to increasing diagnosis rates. Furthermore, the stigma continues to rapidly decline, which enables patients to seek care with greater frequency. Finally, regulatory and legislative support has created viable economic and reimbursement models. All of this has created an environment where smaller providers are looking for capital and the resources to grow.
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Smartronix, a software provider for government organizations, has been recapitalized by tech-focused midmarket firm OceanSound Partners. PHOTO: THE MUSE
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OceanSound Partners, a firm formed in 2018 by former executives from Veritas Capital, TCV and H.I.G. Capital, has announced its first pair of deals, Chris Cumming reports for WSJ Pro Private Equity. The New York-based firm said it backed two software providers that serve government organizations, Smartronix Inc. and Trident Technologies LLC.
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New Mountain Capital is backing Classic Collision Inc., an operator of automotive collision repair shops with 34 locations across four states in the Southeast. The Sandy Springs, Ga.-based company expanded into Florida by acquiring Carolina Auto Body in December. The New York firm invested alongside management to fuel accelerated growth by the technology-enabled business.
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Veritas Capital has agreed to buy Campus Management Acquisition Corp. and Edcentric Holdings LLC from Leeds Equity Partners. Campus management provides systems used by colleges and universities to manage student information, while Edcentric offers cloud-based software used to maintain alumni relationships. Leeds invested in Boca Raton, Fla.-based Campus Management in 2008 and in Edcentric in 2014.
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GI Partners has acquired a majority stake in Honolulu-based DR Fortress LLC, investing alongside company management. DR Fortress operates data centers and the only internet exchange hub in the Hawaiian Islands. San Francisco-based GI Partners focuses its investments on real estate as well as data infrastructure strategies.
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Turnspire Capital Partners has acquired industrial parts maker MPI Holdings LLC and placed Trevor Myers, an executive in residence, in charge as president and chief executive. Based in Rochester Hills, Mich., MPI supplies the auto industry and other manufacturers with highly engineered, stamped and finished metal parts from five plants in the U.S. and Mexico.
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TA Associates is expected to put Orion Advisor Solutions up for sale soon and seek more than $1.87 billion for the portfolio-management technology provider, Luisa Beltran reported for sister publication Barron’s, citing three people familiar with the matter. Representatives of TA and Orion didn't immediately respond to requests for comment from Barron’s. The Boston-based private-equity firm’s involvement in the business dates to May 2015, when it acquired a majority stake in NorthStar Financial Services Group, Omaha, Neb.-based Orion’s parent at the time.
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In its first buyout this year, Ardian is acquiring Frulact, a supplier of ingredients to the food processing industry, from the founding Miranda family. The Maia-Porto, Portugal-based company employs 750 people and makes ingredients from plants, including fruits and vegetables, at nine facilities across Europe, Africa and North America. Ardian said Frulact has nearly €115 million ($128.05 million) in annual revenue.
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Family-owned McNally Capital has made its eighth direct investment with a deal to invest in staffing services provider Re-Sourcing Holdings alongside Jeff Bowling, the founder and former head of Dallas staffing services company Delta Cos. McNally, a private investment firm and merchant bank, was formed by the family that founded publishing house Rand McNally & Co. about 140 years ago. It draws investment capital from a network of more than 800 family offices.
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Yukon Partners has partnered with Industrial Opportunity Partners to support the acquisition of Midwest Recycled and Coated Containerboard Mill LLC, a paper mill based in Combined Locks, Wis.
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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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Brookside Mezzanine Partners has exited its backing of Branford Castle Partners in its acquisition of Surface Preparation Technologies LLC in 2017. Brookside provided subordinated debt and an equity co-investment to the deal through its Mezzanine Fund II LP, according to a news release.
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Riordan Lewis & Haden Equity Partners has sold data analytics company Clarity Insights to Accenture. The Los Angeles-based firm initially invested in Chicago-based Clarity in 2014. Accenture announced the deal about a month ago, without naming the seller.
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Praesidian Capital has sold its stake in legal consulting firm Resolution Economics LLC. Praesidian first invested in the Los Angeles-based business in 2008 and led a subsequent investment round in 2015.
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StepStone Group, one of the biggest private-asset investors with $58 billion in assets under management, plans an initial public offering as early as next month, Reuters reported, citing people familiar with the matter. The deal could value StepStone in line with Hamilton Lane Inc., whose shares have quadrupled in value since its $190 million IPO in 2017, Reuters said. Goldman Sachs Group Inc., JPMorgan Chase Inc. and Morgan Stanley are lead underwriters for the deal, which La Jolla, Calif.-based StepStone registered confidentially.
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Private-equity firm EagleTree Capital became the investment target as AlpInvest Partners, joined by the Alberta Teachers' Retirement Fund Board, Bullingham Capital and a U.K. firm, Misland Capital, committed to a structured financing for the New York-based firm. The backing will let employee-owned EagleTree boost its participation in its EagleTree Partners V buyout fund to become the largest investor in that vehicle. The firm’s backers remain passive minority investors.
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Partners Group expects to raise $15 billion to $19 billion in new client commitments this year, after pulling in $16.5 billion in 2019, bringing its assets under management to $94.1 billion at the end of December. Almost half of the firm’s assets under management, 48%, are in private-equity funds while 23% are in private debt, 16% in real estate and 13% in infrastructure, according to a management briefing Thursday. The publicly traded firm based in Zug, Switzerland said it turned away 97% of the roughly 2,600 investment opportunities it reviewed last year. Partners added 262 professionals to its staff last year, a 22% increase, with almost half of the new roles focused on the Asia-Pacific region.
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Pan-African focused Helios Investment Partners has become the latest private-equity firm to become a certified B-Corporation, a designation awarded for achieving certain standards of environmental, social and corporate governance. One other firm that has earned B-Corp certification in the past 18 months is TowerBrook Capital Partners.
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Frazier Healthcare Partners has secured $617 million for a new life sciences venture pool as it ramps up efforts to launch startups and finance a range of late-stage and public companies, WSJ Pro's Brian Gormley reports. Frazier, formed in 1991, previously made all of its health-care venture-capital and growth-buyout investments from the same funds. In recent years, it has raised separate venture and growth-buyout pools, with its Frazier Life Sciences X LP fund as the latest example.
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Send us your tips, suggestions and feedback. Write to:
Ted Bunker, Laura Cooper, Chris Cumming, Luis Garcia, William Louch, Preeti Singh, Chitra Vemuri.
Follow us on Twitter: @LCooperReports, @LHVGarcia, @LauraKreutzer, @william_louch.
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