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PE Firms See Fundraising Slog Ahead | Inflation Helps Boost Brookfield's Assets | Robert Brockman Dies at 81
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Another week is wrapping up and thankfully the heat wave here in Massachusetts appears to have broken, much to the relief of those of us living in old homes with no central air conditioning. They lose some of their rustic charm in 90-plus degree weather.
As the latest earnings season draws to a close, private-equity has not emerged unscathed although the largest listed firms still outperformed many public stock indices during Q2. But as Maria Armental writes this morning, some of the largest listed firms are bracing for a more challenging fundraising environment in the months ahead. One firm that seems to have gotten a hefty fundraising boost in the quarter is Brookfield Asset Management, which has raised some $56 billion since the end of March, as investor appetite for inflation hedges like infrastructure or real estate spikes, as Luis Garcia reports this morning. Finally, our Wall Street Journal colleagues Miriam Gottfried and Mark Maremont look at the life of Robert Brockman, the billionaire who is perhaps best known for being at the center of one of the largest tax fraud cases in U.S. history and who
passed away earlier this month.
Dive in for more details on these and other stories and have a relaxing weekend…
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Executives at some of the largest private-equity firms see tougher fundraising times ahead as market volatility affects many of their investors. ILLUSTRATION: THOMAS R. LECHLEITER/THE WALL STREET JOURNAL AND ISTOCK
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Private-equity firms are anticipating a tougher fundraising slog as market volatility hits both their own balance sheets and those of their institutional investors, Maria Armental reports for WSJ Pro Private Equity. In recent earnings calls, some of the largest private-equity firms remained bullish about deal-making opportunities in the current environment even as market upheaval and rising rates drove down the value of their holdings.
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Brookfield Asset Management has been able to capitalize on growing investor appetite for infrastructure and real assets in a rising rate environment, reporting that it has raised some $56 billion in fresh capital since the end of March. As Luis Garcia writes, the firm said in its latest earnings call that it ended the second quarter with a record $111 billion in dry powder.
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Robert Brockman, a billionaire who was indicted in 2020 on federal charges that he had committed the biggest individual tax fraud in U.S. history, died on Aug. 5 at the age of 81, Miriam Gottfried and Mark Maremont write for The Wall Street Journal.
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Since 2015, WSJ Pro has published its annual “Women to Watch” list to highlight the accomplishments of outstanding women in the field. We’re accepting nominations for senior deal professionals, rising star deal professionals, as well as limited partner or fundraising professionals through Monday, Aug. 15. For more information and to submit your nominations, simply click on this link.
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$111 Billion
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The total amount of unspent capital available to Brookfield Asset Management at the end of the second quarter, a record for the firm.
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Shares of New York Times rose after ValueAct disclosed a 6.7% stake in the company. PHOTO: LUCAS JACKSON/REUTERS
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Activist investor ValueAct Capital Partners LP has taken a 6.7% stake in New York Times Co. and intends to push the media company to more aggressively market subscriber-only content, Stephen Nakrosis and Patience Haggin write for The Wall Street Journal. In a filing with the U.S. Securities and Exchange Commission on Thursday, ValueAct said it has had and expects to have future conversations with executives and directors of New York Times about various issues, including “whether it makes sense for a ValueAct Capital employee to be on the issuer’s board of directors.”
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Asset manager Arena Investors, growth investment firm Riveria Investment Group and their affiliates have invested in Pacific Production Services Inc., a Los Angeles-based company that helps customers in the film and television industries navigate regulatory and municipal permit coordination and services, including traffic and safety planning, design and staffing services, according to a press release.
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Detroit-based Huron Capital has invested in ExperiGreen Lawn Care, with plans to grow the company into a national residential lawn care provider. The firm said in a news release that the company’s management team will remain in place and that Huron Operating Partner David Alexander will join the company’s board as co-chairman alongside Joe Kucik, who has long owned a majority stake in the company. Mr. Alexander spent six years as chief executive of lawn care company TruGreen, the news release stated.
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St. Louis-based midmarket firm Thompson Street Capital Partners made a growth investment in Silverchair, a Charlottesville, Va.-based provider of content management software and technology for global publishers of scientific, technical, and medical content, according to a press release.
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Compass Group Equity Partners, a St. Louis-based private-equity firm, has invested in Orlando, Fla.-based Florida Energy, Water & Air, which sells, installs and services water treatment systems, water heaters, heating, ventilation and air conditioning products across Florida, Georgia and Alabama, according to a news release.
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Lower midmarket firm Edgewater Capital Partners is backing GL Chemtec International Ltd., a Canadian contract research company that works with the pharmaceutical, biotechnology, and materials science sectors
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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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Riverside Co. has sold Parker Food Group to London-based investment group Investindustrial. Financial terms weren’t disclosed. Riverside had invested in the Texas-based company in 2017. Parker Food Group will be part of Investindustrial’s group of food ingredients companies, including CSM Ingredients, Hi-Food and Italcanditi.
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Elan Growth Partners LLC has sold Custom Power LLC to Solid State PLC. The London-listed electronics manufacturer and distributor last month said that under the terms of the deal, it would pay as much as $45 million for the California-based battery-systems manufacturer and energy-solutions provider. That would include $10 million that would be payable in two equal tranches within a year of completion and $5 million payable subject to a revenue performance target. CVF Capital Partners had supported Elan’s investment through equity and subordinated debt.
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KKR & Co. has rounded up at least $7.42 billion so far for its latest flagship European buyout fund, KKR European Fund VI (EUR) SCSp and related parallel funds, regulatory filings indicate. The amount raised so far includes the firm’s own general partner commitment, according to the filings. KKR closed the fund’s predecessor back in 2019 with €5.8 billion in commitments and an additional $400 million pledged from KKR and its employees, according to a press release issued at the time.
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Apollo Global Management said it has raised $2.35 billion for Apollo Origination Partnership Fund I LP, a new direct lending fund focused on companies that generate more than $100 million in earnings before interest, tax, depreciation and amortization, according to a press release.
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Conversus, an investment platform owned by StepStone Group that seeks to offer high net worth individuals access to private markets, said it has launched Conversus StepStone Private Venture and Growth to certain qualified investors for a minimum investment of as little as $50,000, according to a press release. The fund primarily will focus on acquiring venture and growth equity fund interests on the secondary market, as well as backing later stage direct investments and limited seasoned primary investments, according to a press release. The firm aims to hold a first closing of the vehicle over the next several months, according to the release. It will be
structured as an evergreen fund that offers liquidity through quarterly tender offers.
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American Discovery Capital, a Los Angeles-based merchant banking firm, has raised at least $67 million so far of the $200 million it is seeking for American Discovery Fund II LP, according to a regulatory filing. The firm invests its private-equity funds in software and services companies with $10 million to $50 million in revenue, according to its website.
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H.I.G. Capital has hired Carlos Soto as managing director and head of U.S. private equity business development. Mr. Soto previously worked for MSD Partners LP, an investment firm backed by technology billionaire Michael Dell’s family office.
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Midmarket private-equity firm Kian Capital Partners has hired Jordan Lee as a principal at the firm. Mr. Lee, who was most recently managing director at Starr Investment Holdings, will focus on the tech-enabled-business services and healthcare services sectors.
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Sterling Investment Partners has promoted Dan Yu to principal on the investment team. Before joining Sterling in 2013, Mr. Yu worked at Corinthian Capital Group.
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The U.S. Securities and Exchange Commission is looking into Melvin Capital Management risk controls and investor disclosure after the hedge fund was crippled by the meme-stock rally last year,Juliet Chung, Susan Pulliam and Dave Michaels report for the Journal, citing people familiar with the matter. The regulator has contacted investors in the hedge fund in recent months as part of an investigation into what Melvin founder Gabriel Plotkin and other senior executives told them in the wake of the meme-stock rally in January 2021, and whether it misled investors when it raised money last year.
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Canada Pension Plan Investment Board, which manages pension assets for Canada’s national pension fund, saw its assets decline to $523 billion during the quarter ending June 30, down from $539 billion in the previous quarter. The fund lost 4.2% during the quarter, driven largely by declines in public equities, but still outpacing many public stock indices, according to an earnings release.
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Canadian listed private-equity firm Onex Corp. joined the string of listed private-equity firms posting net losses for the quarter ending June with a $184 million net loss compared to a $174 million net profit for the same period last year. As of June 30, the firm had around $33.5 billion in third-party fee-generating assets under management, a 1% increase from the end of last year, according to its latest quarterly earnings report.
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Crestline Investors Inc. enters the direct annuity insurance market through a strategic acquisition and launch of CL Life and Annuity Insurance Co. CL Life will offer insurance products to independent agents through tax-deferred fixed annuities.
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