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Banner Ridge Sues Brightwood Over Continuation Fund | CVC Preps Public Listing, Again | KKR Eyes Japan for Growth
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Happy Patriot’s Day (for those of you in Maine and Massachusetts)! Best of luck to any of you out there that may be running the Boston Marathon (or cheering on friends and loved ones that are doing so).
It’s no secret that more private capital firms are turning to continuation funds as a tool for offering fund investors liquidity. But not all of the transactions proceed smoothly, or even at all. This morning, Rod James has news of a lawsuit that secondary investor Banner Ridge Partners has filed against private credit firm Brightwood Capital over alleged breach of terms for a continuation fund agreement. Also, our Wall Street Journal colleagues Ben Dummett and Cristina Roca report that CVC Capital Partners is preparing to take another run at a public listing, after pulling a previous initial public offering plans last November. Finally, Luis Garcia delves into KKR’s optimism about the future of dealmaking in Japan.
Read on for more details
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Banner Ridge is suing Brightwood in a local court in Manhattan. PHOTO: ANDREW KELLY/REUTERS
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Brightwood Capital, a private-credit lender to small and midsize businesses, faces a legal challenge over a roughly $253 million continuation-fund deal set up with Banner Ridge Partners involving several Brightwood funds, Rod James reports for WSJ Pro. New York-based Banner Ridge, a specialist credit investor, sued Brightwood earlier this month alleging that the fund sponsor had reneged on an agreement last year that called for Banner Ridge to acquire secondhand stakes in several Brightwood private-credit funds for as much as $253.5 million.
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Buyout firm CVC Capital Partners is set to kick off a planned Amsterdam share sale Monday, targeting a valuation of up to $16 billion in the latest sign of a pickup in initial public offerings, Ben Dummett and Cristina Roca report for the Journal. CVC is looking for a valuation of about €13 billion to €15 billion, people familiar with the matter said, or the equivalent of $13.8 billion to $16 billion. It aims to raise more than €1 billion by selling stock from existing shareholders and issuing new shares, assuming the offering is launched as planned, some of the people said. The firm pulled a previous IPO attempt in November, as the outbreak of war in the Middle East
weighed on an already jittery market. Conditions have since improved.
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Around 40 years ago, KKR pioneered the buyout movement by carving out subsidiaries of U.S. conglomerates. Now the asset manager is finding similar opportunities in Japan, WSJ Pro’s Luis Garcia reports. The New York-based asset manager said it sees the Asia-Pacific region as vital to its goal of doubling its assets under management from $553 billion at the end of December to more than $1 trillion in the next five years. The firm has chosen Japan as its main market in the region, partly because of the many opportunities it sees to buy businesses at bargain prices, KKR executives said Wednesday during the firm’s annual meeting with investors in New York.
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$100 Billion
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The estimated amount of dry powder held for healthcare investing by U.S. private-equity firms as the year began, according to research provider PitchBook Data
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PHOTO: GABBY JONES/BLOOMBERG NEWS
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Brookfield Asset Management is in talks to acquire a majority stake in Minneapolis-based private credit firm Castlelake, The Financial Times reported on Friday. Brookfield Asset Management is discussing an investment of more than $1.5 billion in the firm, the FT reported, citing people familiar with the matter. Castlelake manages around $22 billion in assets.
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General Catalyst is backing business software maker Factorial with an $80 million growth investment through the firm’s customer value strategy, according to the company. Based in Barcelona, Spain, the business now counts more than 10,000 clients for its management programs designed for smaller companies. Factorial said its enterprise value topped $1 billion following a Series C growth investment round in October 2022.
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StepStone Group is backing blockchain company Auradine alongside Top Tier Capital Partners, MVP Ventures and Maverick Capital in an $80 million growth investment, which included participation from existing investors. The Santa Clara, Calif.-based company also operates bitcoin cryptocurrency mining systems.
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Family office investment firm Saham Group has agreed to acquire the Moroccan businesses Societe Generale Marocaine de Banques and La Marocaine Vie of French banking giant Societe Generale for €745 million, or about $799.2 million, Andrea Figueras reports for Dow Jones Newswires. The agreements are subject to approval and call for the bank to sell its nearly 58% stake in Societe Generale Marocaine de Banques including its subsidiaries as well as interests it controls in insurance company La Marocaine Vie.
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Brightwood Capital Advisors and BlackRock are supporting a management buyout at communications and electrical infrastructure design and construction company Hylan, whose leaders Robert and John DiLeo Jr. are acquiring a majority interest in the Holmdel, N.J.-based business.
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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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Omers Private Equity, the private-equity investment affiliate of Canadian pension system Ontario Municipal Employees Retirement System, is exploring a potential initial public offering of tank-truck logistics provider Kenan Advantage Group, Bloomberg News reported. Omers initially acquired Kenan in 2015.
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Gallatin Point Capital-backed insurer Bowhead Specialty Holdings plans an initial public offering of shares, although it hasn’t disclosed how many or at what expected price range, a regulatory filing shows. Greenwich, Conn.-based Gallatin backed the New York property and casualty insurer in 2020, sponsoring its formation alongside American Family Mutual Insurance, according to the firm’s website. The filing doesn’t indicate how many shares, if any, Gallatin expects to sell in the IPO.
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Silver Point Capital has raised at least $4 billion so far for Silver Point Distressed Opportunity Institutional Partners II LP and related parallel funds, regulatory filings indicate. Investors that have approved commitments to the new fund include the Texas County & District Retirement System and Employees’ Retirement Fund of the City of Dallas. The amount raised so far puts the distressed debt fund at a $4 billion target indicated in documents presented to the Dallas Employees’ Retirement Fund at
its February board meeting. The documents state that the fund has a $6 billion upper limit, or hard cap.
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Chicago-based Twin Bridge Capital Partners has rounded up at least $233 million so far for Twin Bridge Narrow Gate Fund II LP, putting the fund of funds more than halfway toward a $450 million offering amount indicated in a regulatory filing. Twin Bridge’s Narrow Gate funds-of-funds strategy focuses on lower midmarket buyout funds and co-investments alongside those funds. The firm closed its first Narrow Gate fund in 2021 with $440 million.
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Simpson Thacher & Bartlett has hired Adam Z. Risell as a partner in its investment funds group focused on structured fund products, according to an emailed statement. Washington-based Risell advises on forming complex investment vehicles such as rated note fund structures, collateralized loan obligations and collateralized fund obligations. He joins from law firm Cadwalader, Wickersham & Taft.
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Mutual fund firm Franklin Templeton has quietly become a major force in private markets, Miriam Gottfried reports for the Journal. The 77-year-old asset manager made its name marketing mutual funds for individual investors. Thanks to a recent spate of acquisitions, it now manages more than $260 billion in so-called alternative assets such as private credit. In just the past five years, the firm acquired private-credit manager Benefit Street Partners; private real-estate investment firm Clarion Partners—as part of a deal for asset manager Legg Mason; Lexington Partners, a major player in the business of buying stakes in private-equity funds; and European credit manager Alcentra. Alternatives accounted for
18% of assets and 25% of management fees as of the end of last year.
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Shareholders can’t sue a company for remaining silent on risks or trends that might have a material impact on its business, the Supreme Court ruled Friday. As The Wall Street Journal’s Dylan Tokar writes, in a unanimous decision, justices for the court found that Macquarie Infrastructure couldn’t be held liable by investors for securities fraud by failing to disclose how a United Nations regulation on fuel oil might impact the bottom line of the terminals it operates to store bulk liquid commodities.
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Canada said on Friday it intends to curb private-equity activity in the country's residential real-estate market, part of a suite of housing policies aimed at addressing stretched housing affordability and a dire shortage of homes, Dow Jones Newswires Paul Vieira writes. Officials say the new measures will be formally presented in next week's annual budget plan, and both Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland have crisscrossed the country in the past two weeks revealing some of the new policies.
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BlackRock, the world’s largest asset manager, said its total assets under management climbed to $10.47 trillion by the end of March, including a 7.7% gain in illiquid alternative assets. The New York firm said alternative assets of all types, including hedge funds, increased about 3% to $243 billion. Illiquid alternatives rose to $167 billion, including $42 billion in private equity, up 10.5% from the end of March last year.
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Norway’s finance minister said Friday that the nation’s $1.6 trillion sovereign wealth fund shouldn’t be allowed to invest in private-equity funds, rejecting a Norway central bank recommendation of allocating as much as $80 billion to the asset class, Reuters reported from a press conference held by Finance Minister Trygve Slagsvold Vedum. But he said the ministry would continue to consider the move.
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Bain Capital is making some of its credit funds available to individual investors through a partnership with iCapital, which offers technology that helps wealth advisers provide their clients with easier access to private capital funds.
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Illumina, a maker of gene-sequencing machines, said it has received permission from European regulators to divest its Grail cancer screening test company, which it acquired for around $7.1 billion over opposition from the U.S. Federal Trade Commission and the European Commission. European regulators fined Illumina about $463 million for going ahead with the deal, sister publication Barron's reported. San Diego-based Illumina said on Friday that a condition of the European Commission’s divestment approval is that if Grail is spun off, Illumina has to make sure it has the roughly $1 billion needed to keep it operating for at least 30
months. Illumina said it is exploring sale possibilities as well.
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Michael Klein, the banker who founded M. Klein and Co., is back on the blank-check company path, seeking to raise $250 million for Churchill Capital Corp IX through an initial public offering of shares, a securities filing shows. The filing doesn’t specify sectors where the special-purpose acquisition company expects to find candidates for a combination that would give the target a public listing.
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