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KKR Curbs Redemptions From Real-Estate Fund | New FTX Leader Ray Considers a Reboot
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Good day and TGIF! We're wrapping a busy, holiday-shortened week with a story from our Chris Cumming about two more asset managers turning away investors seeking to cash out of their real-estate funds. Both KKR and Starwood cited redemption requests that exceeded the limits for their funds, joining Blackstone in curbing such outflows.
Also, our WSJ Pro Bankruptcy colleagues offer an exclusive discussion with the head of FTX, who took over the now-bankrupt cryptocurrency exchange in November and says he is considering the possiblity of restarting its international operation.
We have those stories and many more summarized for you below so please read on...
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KKR is located in New York’s 30 Hudson Yards building.
PHOTO: SPENCER PLATT / GETTY IMAGES
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KKR & Co. has limited how much money investors can withdraw from its private real-estate fund, joining fellow asset managers Blackstone Inc. and Starwood Capital Group Management in seeking to curb redemptions, Chris Cumming reports for WSJ Pro Private Equity. New York-based KKR fulfilled just $79 million out of $128 million of withdrawal requests, or 62%, from its $1.6 billion KKR Real Estate Select Trust Inc., or KREST, for the redemption period ended Jan. 13, the firm said Wednesday in a Securities and Exchange Commission filing. KKR said the quarterly redemption requests equaled 8.1% of the fund’s net asset value, while the fund—which isn’t
publicly traded and invests in real estate and debt backed by real estate—limits withdrawals to 5% per quarter.
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FTX’s new chief executive, John J. Ray III, said he is looking into the possibility of reviving the bankrupt cryptocurrency exchange as he works to return money to the failed company’s customers and creditors, Alexander Saeedy and Alexander Osipovich report for WSJ Pro Bankruptcy. In his first interview since taking over FTX in November, Mr. Ray said that he has set up a task force to explore restarting FTX.com, the company’s main international exchange. Although top FTX executives have been accused of criminal misconduct, some customers have praised its technology and suggested that there would be value in rebooting the platform, he said.
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$922.94 Billion
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The amount collected by 2,024 private-equity and venture-capital funds last year, down almost 11% from 2021, according to S&P Global Market Intelligence data
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A card at a vendor's stall in India shows a PhonePE card with a QR code for its digital payment system. PHOTO: DHIRAJ SINGH / BLOOMBERG NEWS
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General Atlantic is backing financial-technology company PhonePe in India with a $350 million investment that values the company at $12 billion premoney, according to a spokeswoman. Marquee Global and investors in India are also participating in the investment round that could total as much as $1 billion, according to a news release. The fresh capital is expected to help the payments company develop its digital financial services, including through the construction of data centers in the country. PhonePe
formally separated from Indian e-commerce company Flipkart last month and said it now has more than 400 million registered users. The company’s website offers guidance on a variety of services such as insurance and choosing mutual funds for investment.
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Healthcare investor OrbiMed and life-sciences-focused Braidwell have provided as much as $400 million to molecular science and technology company Caris Life Sciences through a senior secured term loan, according to a news release. The Irving, Texas-based company plans to repay debt and enhance its development systems with the fresh capital. OrbiMed previously backed the company through equity investments in 2021 and 2020. Braidwell hasn’t previously invested in Caris.
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Flexpoint Ford is backing insurance agency Keystone Agency Partners through a preferred equity investment, according to a news release. The firm is investing through its Flexpoint Ford Asset Opportunity Fund II. The Harrisburg, Pa.-based startup formally began operations in early 2020 with backing from Bain Capital and Keystone Insurers Group Inc., according to a news release. It has grown rapidly through 47 acquisitions to gain a presence in 11 states and bring in around $175 million in revenue, according to its website.
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One Rock Capital Partners said it has acquired environmental and waste management services provider EnviroServe Inc. through a carveout from Savage Services Corp., which focuses on logistics and supply-chain services and is based near Salt Lake City in Midvale, Utah. Cleveland-based EnviroServe provides clean up, waste management other services from locations around country.
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Midmarket investor HGGC in Palo Alto, Calif., said it is backing dental practice services provider Dentive LLC with a growth investment. The Provo, Utah-based business partners with dentists to supply management services to their practices and has agreements with nearly 70 mainly in western U.S. states, according to a news release.
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Astara Capital Partners in New York said it is backing contract manufacturer Wyandot Inc., which operates as Wyandot Snacks. The Marion, Ohio-based company makes snack foods, cereals and other products for brands and private-label customers, according to a news release.
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JMI Equity is backing marketing materials and technology company Visiting Media LLC with a growth investment, according to a news release. The Portland, Ore.-based company provides digital tools to depict hotel and hospitality accommodations that are used to market services and locations, according to its website.
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Battery Ventures said it has agreed to become the primary investor in payments company AscendantFX Capital Inc. to help accelerate growth and drive product innovation. Toronto-based Ascendant’s technology is used to facilitate cross-border payments, according to a news release.
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Riverside Co. said it has joined Hammond, Kennedy, Whitney & Co., also known as HKW, in its acquisition of information technology managed-services provider franchisor CMIT Solutions LLC and the company’s largest franchise operator, HTW Inc. The Austin, Texas-based company had more than $100 million in revenue last year through franchises that provide services that include data backup and network security. Indianapolis-based HKW announced its investment last week.
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Fengate Asset Management said it has closed on financing for the construction of the 160-megawatt Prairie Switch Wind development in Texas. Project plans call for 48 generators and associated towers to be built this year on a site in Wharton County. Backers of the project include LiUNA Pension Fund of Central and Eastern Canada, according to a news release.
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Decathlon Capital Partners is backing food manufacturer Roth Industries with a revenue-based growth investment, according to a news release. The Colorado Springs, Colo.-based company makes packaged prepared foods.
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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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A Vista Equity Partners-backed e-discovery company, Zapproved LLC, is being acquired by legal information technology provider Exterro Inc., which is backed by Leeds Equity Partners. Beaverton, Ore.-based Exterro’s software-as-a-service technology is used to manage the operations of law firms. Leeds first backed the business in June 2018, according to its website. Vista first invested in Portland, Ore.-based Zapproved through its Endeavor fund in 2017 and retains a stake, according to a spokesman. Another Zapproved investor, K1 Investment Management, said it is also selling but retaining an interest in the business.
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Equistone Partners Europe has sold electronics connectors supplier Bulgin Ltd. in Cambridge, England to strategic buyer Infinite Electronics Inc. Equistone first backed the maker of environmentally sealed connectivity components in September 2019 and helped the company increase its revenue by 53% over that period, its website shows.
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Private-equity firm Helios Investment Partners is discussing a combination of certain assets with U.S. blank-check company Onyx Acquisition Co. I in a deal that values the assets at about $1 billion, including debt. Yesterday’s newsletter incorrectly indicated the transaction would be a combination of Helios itself with the blank-check company, citing a Reuters report.
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B Capital Group said it raised about $2.1 billion for its third growth investment fund, Growth Fund III, and parallel vehicles, which it aims to invest in companies around the world but is focused on the U.S. and Asia. The firm started in 2015 has a strategic partnership with Boston Consulting Group and has about $6.3 billion in assets under management, according to a news release.
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Singapore private-equity firms Capital Square Partners and Basil Technology Partners said they have formed a partnership and together raised about $700 million for a new investment fund, CSP Fund II. The firms said the fund’s lead investors include vehicles managed by HarbourVest Partners and TPG NewQuest. TPG Inc. acquired a majority stake in Asia secondary specialist NewQuest Capital Partners in 2021. Paris-based secondaries investor Committed Advisors is also backing the fund.
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Garnett Station Partners said it has raised $850 million for its two GSP 4.0 Fund LP vehicles, closing its fundraising at the drive’s hard cap after being in the market for about six months.
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Consulting company Bain & Co. in Boston said it has named Sebastien Lamy as co-head of private equity in the Asia-Pacific region based in Tokyo. He previously led Bain’s infrastructure practice in the region and joined the business more than 20 years ago, according to a news release. He succeeds Andrew Tymms, who stepped back from the role at the end of last year but remains a part-time adviser to the firm, according to his LinkedIn page. He rose to senior partner in the global private-equity practice over a more than 27-year career with the company.
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J.F. Lehman & Co. in New York said it has hired Erik Toth as a managing director in portfolio operations and made a number of other hires and promotions. Mr. Toth previously founded Larx Advisors to work with private-equity firms, family offices and midmarket companies on finances, accounting, marketing and operations, according to a news release.
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Real-estate-technology-focused investment manager Fifth Wall Asset Management said it has hired Alok Sindher as a partner focused on infrastructure investing and Heather McGeory as head of climate and ESG partnerships, focusing on environmental, social and governance as well as decarbonization strategies. Mr. Sindher was previously a D.E. Shaw Group partner while Ms. McGeory joins from APCO Worldwide, according to a news release.
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Alpine Investors in San Francisco said it has promoted Dorothy Walter, Daniel Cohen and Jake Brodsky to partner and Tal Lee Anderman to chief talent officer. The firm also moved up Jacob Zodikoff to principal and hired Alexandria Stuart as general counsel and chief compliance officer.
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Blackstone's Stephen Schwarzman speaks during an event in November. PHOTO: GARY HE / REUTERS
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Blackstone Inc.’s Stephen Schwarzman said exposure to warehouses and apartments buoyed its BREIT real-estate fund during a punishing period when some rivals lost up to a quarter of their value, Kristen McGachey reports for sister publication Barron’s. The firm's co-founder and chief executive made the comments about its Blackstone Real Estate Income Trust in an interview at the World Economic Forum in Davos, Switzerland. He said BREIT, as it’s known, weathered higher interest rates by avoiding areas
of “real stress” in the real-estate market such as offices and shopping malls.
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Gullane Capital, Ibex Investors and ICG Advisors are among the largest holders of secured convertible notes in bankrupt bitcoin miner Core Scientific Inc., WSJ Pro Bankruptcy’s Becky Yerak reports for Dow Jones Newswires, citing a court filing. Apollo Global Management Inc., BlackRock Inc. and Massachusetts Mutual Life Insurance Co. are also among holders of 2021 Core Scientific notes, the document shows. Some noteholders are also providing financing that will help the Austin, Texas-based company get through its chapter 11 restructuring. Besides holding $62.4 million in secured convertible bonds, Gullane is also a shareholder in the publicly held business, the filing said.
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An analysis of data from last year shows that the number of private-equity and venture-capital funds that closed last year fell about 46% from the previous year, dropping to 2,024 funds from 3,743 in 2021, according to S&P Global Market Intelligence. The amount of capital raised declined by about 11% to $922.94 billion, however. The numbers seem to confirm what many industry observers and executives noted last year: Fundraising had grown more difficult and institutional investors were increasingly inclined to back vehicles from larger firms, indicating that the market was more challenging for smaller firms seeking to collect money for funds with much lower capital goals.
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The Massachusetts Pension Reserves Investment Management Board said the state pension system investment manager placed more than $2.8 billion of investible assets with diverse fund managers last year, bringing the total amount of its assets run by such advisers to over $9 billion. The system known as MassPRIM also said it designated more than $340 million for 15 emerging diverse managers. MassPRIM’s total assets under management stand at about $92 billion, a spokesman said.
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