Happy Friday! As we close out the week, earnings season is kicking into gear with both Ares and TPG reporting today. So stay tuned!

This morning’s newsletter starts off with a story from our own Chris Cumming, who looks at efforts across three different states to regulate private-equity investments in law firms, moves that threaten to dampen private-equity law firm deals before they even get off the ground.

Meanwhile, our WSJ colleague Matt Wirz reports that first-quarter fundraising for Blue Owl Capital’s smaller investment strategies, such as real estate and infrastructure, helped offset stalled growth in the firm’s private-credit business.

Read on for more details and have a great weekend…

Private equity has barely begun investing in law firms, but the backlash has already started. Lawmakers in three states are considering bills to make it harder for buyout firms and other corporate investors to buy law practices, a burgeoning investment strategy that was long off limits for private equity, Chris Cumming writes for WSJ Pro. In California and Illinois, legislators in April advanced bills that would cement prohibitions on nonlawyers’ owning or controlling legal practices. In Colorado, a bipartisan group of lawmakers introduced a similar bill last week, which on Wednesday passed the House Judiciary Committee.

Blue Owl Capital reported stronger fundraising for its smaller businesses in the first quarter, offsetting stalled growth in its flagship private-credit unit, Matt Wirz reports for The Wall Street Journal. Overall, the New York firm raised $9 billion in the period, up from $6.7 billion a year ago, fueled by real estate, infrastructure and other areas. Blue Owl's credit funds collected $4.1 billion compared with the $4 billion brought in during last year's first quarter. Distributable earnings climbed 11% to $292.5 million while total assets under management rose to nearly $315 billion, up 15% from a year ago.

Activist hedge fund ADW Capital, run by Adam Wyden, aims to remove private-equity firm Roark Capital as majority owner of Meineke auto repair shops parent Driven Brands by offering to buy the company for nearly $3 billion, AnnaMaria Andriotis reports for the Journal, citing a letter from ADW. The hedge fund is offering $18 a share for Driven, representing a roughly 41% premium to the company's closing price Wednesday. ADW wants to overhaul Driven, saying the business is suffering from "self-inflicted structural, capital allocation and governance failures."

Buyout firm KKR & Co. has formed Hometown Soccer Holdings in partnership with Major League Soccer to support new stadium development for lower-level teams through MLS Next Pro, expanding brands and the reach of the national organization and its affiliated teams. MLS Next Pro has 30 competing teams representing cities such as Grand Rapids, Mich., and Jacksonville, Fla.

Asia-focused investor MBK Partners has dropped its offer to acquire Tokyo-listed Makino Milling Machine after the Japanese government urged the Seoul-based private-equity firm to stand down. The company said the offer was terminated Thursday. MBK Partners said last week that regulators in Japan had expressed concern that the information Makino possesses, if combined with other data, could be considered sensitive from a national-security perspective, Kosaku Narioka reported earlier for Dow Jones Newswires. Makino shares were little changed Thursday. The company has a market capitalization of about $1.84 billion.

Irish energy company DCC has rejected a proposal from KKR & Co. and Energy Capital Partners to acquire the business for £58 per share in cash, after company directors "unanimously concluded that it fundamentally undervalues the company and its future prospects," Anthony O. Goriainoff reports for Dow Jones Newswires. The proposal valued the company at £4.95 billion, or $6.67 billion. DCC shares fell about 5.8% in London to close at £55.40.

Pacific Avenue Capital Partners has agreed to acquire Oldcastle Lawn and Garden from its publicly traded parent CRH in a carveout deal valued at $1.1 billion. Pacific Avenue will rename the manufacturer of lawn and garden consumable products as GardenCore.

Existing investor KKR and Neuberger Berman are acquiring industrial products company Flow Control Group in a transaction that will give Neuberger Berman a minority stake in the company and allow KKR to retain a majority stake. KKR had initially acquired Flow Control in 2021. As part of the transaction, all of Flow Control’s more than 3,000 employees will receive cash payouts and KKR and Neuberger Berman will re-establish a broad-based employee ownership program at the company.

Early-stage investor Intrepid Growth Partners in Toronto and Alphabet's venture investment arm led a $77 million commitment backing medical technology and services company Iterative Health, joined by several other investors including Insight Partners. The Cambridge, Mass.-based company operates a clinical research network that includes proprietary artificial-intelligence technology that is used to help accelerate research and development work.

Direct investment firm Dorilton Capital in New York led a $65 million growth investment in engineering software developer JuliaHub, joined by others including General Catalyst. The Cambridge, Mass.-based company's new Dyad 3.0 applications use agentic artificial-intelligence technology to map out everything from heat pumps to satellites and semiconductor circuits.

Technology investor Integrum Holdings led a strategic investment into wealth manager Allworth Financial, joined by existing backers Lightyear Capital and the Ontario Teachers' Pension Plan as co-lead investors in the transaction, which is expected to accelerate the Folsom. Calif.-based company's expansion. Allworth has about $35 billion in assets under management or administration.

Apterra Infrastructure Capital has closed a credit facility for data-center developer and operator ValorC3 Data Centers to support the continued construction of its Boise, Idaho, data-center project. ValorC3 Data Centers is backed by CVC Capital Partners’ infrastructure investment strategy CVC DIF.

Hamilton Lane and GCM Grosvenor have bought a nearly 50% stake in Big Sky Wind from Power Sustainable Energy Infrastructure. Big Sky Wind operates a 240-megawatt operating wind facility in Illinois.

Apax Partners is a potential frontrunner to acquire CloserStillMedia, a U.K. events company backed by fellow private-equity firm Providence Equity Partners, Reuters reports, citing two people familiar with the deal. Providence previously backed CloserStill in 2018, according to the private-equity firm’s website.

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

Blue Owl Capital "made about 10 [times] our money" from the sale of about half of its equity investment in Elon Musk's SpaceX, Marc Lipschultz, the private-credit  firm's co-chief executive, said during a conference call with analysts Thursday. "We've sold about half of it at a $1.25 trillion valuation, still holding about half of it," Lipschultz said, according to transcripts from FactSet and S&P Global Market Intelligence. Blue Owl was among the earliest lenders to the rocket-maker and satellite operator, and after repeated loans had the chance to acquire equity in the company, Lipschultz said. SpaceX is reportedly aiming to go public in June.

Lone Star Funds affiliate Nani Holdings has completed its sale of Portuguese bank Novo Banco to European bank BPCE for an acquisition price of €6.7 billion, or $7.8 billion, as of April 30. Lone Star acquired a 75% stake in Novo Banco in 2017.

Declaration Partners, the family office investment firm of Carlyle Group co-founder David Rubenstein, has agreed to sell construction materials company New Frontier Materials to publicly traded Martin Marietta Materials. Declaration led the acquisition of the company in 2021.

Soho Square Capital is selling its investment in digital consulting company CreateFuture to strategic buyer Version 1. London-based Soho has backed the business since 2023.

Investindustrial has closed its latest lower midmarket fund Investindustrial Lower Mid-Market IV at its upper limit of €1.5 billion, or around $1.75 billion, according to an emailed news release. The new fund held a first and final closing that came in above both its €1.25 billion target and the €1.1 billion that the firm raised for its predecessor back in 2023.

Ares Management’s secondary strategy and secondary firm Lexington Partners are serving as lead investors in a continuation vehicle to recapitalize Reverence Capital Partners-backed wealth-management firm Osaic in a more than $2 billion deal. Reverence  committed capital to the transaction from its current main private-equity fund and Bain Capital is also investing as part of the broader deal. Reverence initially backed Scottsdale, Ariz.-based Osaic in 2019. The company has about 10,000 financial advisers and oversees around $747 billion.

Boyne Capital in Miami closed on $355 million in investor commitments to its third commingled investment vehicle, BCM Fund III, and said that with parallel funds and the genera-partner contribution, the firm has collected over $400 million for the total pool. The firm had a $275 million target for the vehicle and began marketing last year, a regulatory filing indicates. Boyne focuses on backing family- and founder-owned lower middle-market businesses.

Specialist investor SK Capital Partners has added Jason Grapski as a managing director, portfolio excellence, to work with managers of businesses it holds. He joins from Berkshire Partners.

Riverwood Capital, which invests in fast-growing technology companies, appointed Mac Hofeditz as managing director for capital formation, the Menlo Park, Calif., firm said in an emailed news release. Hofeditz has over 25 years raising private-equity capital, most recently at Vector Capital Management.

Consulting firm and interval fund manager Cliffwater has appointed Sean Murray as head of retirement solutions at the firm to help it expand its reach in dedicated retirement channels. Murray joined from Goldman Sachs.

Dawson Partners in Toronto has added Rachel Guan as a senior principal and head of Asia institutional, based in Hong Kong, where the firm has opened its first office in the region. She was previously with private-equity placement agent FirstAvenue, according to her LinkedIn page.

Beach Point Capital Management in Santa Monica, Calif., has hired Fred Storz as a managing director, based in New York to work with Eric Storch, global head of client partnerships and business development, according to an emailed news release. Storz joins from Energy Capital Partners.

Early-stage technology and media investment firm One Planet Group in Walnut Creek, Calif., has appointed Sam Veazey as chief financial officer, succeeding Carlton Hamer. Veazey was recently with Inspirato and Sandbox VR.

Law firm Cleary Gottlieb is adding David Christmas as a partner in its London office starting May 5, sister publication Financial News reports from Britain's capital. Christmas joins from Fried Frank, where he worked on private-markets fund formation.

Investment bank Lazard is buying Campbell Lutyens, a London-based firm that specializes in helping private-equity firms raise money, for $575 million, the Journal reports. Lazard plans to combine Campbell Lutyens with its existing private-capital advisory arm. Between them, the firms raised more than $190 billion of capital for clients over the past two years.

Swiss buyout firm Partners Group has blasted an assessment by hedge fund-connected Grizzly Research, calling it a "frivolous, defamatory, and highly misleading report" about the firm's asset valuation methods and is "evaluating legal action, including filing reports with applicable regulators for potential market manipulation." The firm said Grizzly also has a short-selling hedge fund. Siegfried Eggert runs Grizzly and also manages funds raised by Grizzly Capital Partners in New York, including a hedge fund with about $57.7 million as of February, regulatory filings show. Partners Group faulted the Grizzly report for looking at a few of its U.S. assets and making incorrect statements and drawing false conclusions.

European buyout firm CVC Capital Partners ended the first quarter with fee-paying assets of about €150.7 billion, or about $175.96 billion, up about 1.6% from the end of last year, Elena Vardon reports for WSJ Pro. CVC’s nonprivate-equity strategies—credit, secondaries and infrastructure—now make up slightly more than half of total client assets, it said.

SoftBank Group is forming a business focused on the intersection of artificial intelligence and robotics, an area that Chief Executive Masayoshi Son sees as the "next frontier" for the Japanese conglomerate, and plans to take it public as soon as the second half of this year, Kate Clark reports for the Journal.

Carlyle Group is bolstering a partnership with financial technology and asset-management services provider SEI aimed at expanding access to private-markets investments across private wealth and retirement channels, including to defined contribution funds. The partnership builds on an existing relationship Carlyle has had with SEI for fund administration and technology enablement services.

Copenhagen Infrastructure Partners has formed Perigus Energy partly from Ørsted’s European onshore business, which the Danish investor acquired through its fifth flagship fund. Perigus plans to develop onshore wind, solar and battery storage projects in Ireland, Germany, the United Kingdom and Spain, adding to its existing and under-construction capacity of 826 megawatts.

A blank check company formed by M. Klein & Co. founder Michael Klein raised gross proceeds of $414 million through an initial public offering Thursday at $10 a share that brought in $412.5 million while a private placement  added $1.5 million to the amount placed in trust for use by Churchill Capital Corp XII to pursue a combination with an operating company. Klein, a former Citigroup banker, has led multiple special purpose acquisition companies, or SPACs, since at least 2018. His most recent prior SPAC, Churchill Capital Corp XI, also raised $414 million in December and remains in the hunt for a merger target, according to a regulatory filing. He leads the new SPAC as well as Churchill CC XI.

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