Welcome back! Private credit continues to dominate the news cycle as we kick off the week with two stories that look at different ways firms are looking to capitalize on the uncertainty plaguing the asset class. First, our own Isaac Taylor reports that Sycamore Tree Capital Partners is launching a dedicated private-credit secondary strategy and has tapped a former Banner Ridge Partners managing director to lead it. Meanwhile, our Wall Street Journal colleagues look at a push among large banks to launch an index of credit-default swaps to offer investors protection against defaults from private-credit firms and other financial institutions. Finally, the Journal also looks at whether private equity may follow its private credit peers in facing investor panic over the reliability of portfolio valuations. 

Dive in for more details on these stories and many more …

Sycamore Tree Capital Partners is launching a dedicated private-credit secondary strategy and has tapped former Banner Ridge Partners Managing Director Robert O’Connor to lead the new group, WSJ Pro’s Isaac Taylor reports. The Dallas-based firm is betting on a wave of private-credit secondary opportunities as the asset class comes under continued liquidity pressure.

Large banks including JPMorgan Chase are preparing to offer a new way for investors to bet against managers of private-credit funds, the Journal reports. The banks are working with S&P Global to launch an index of credit-default swaps that would protect buyers against defaults by companies included in the index, called CDX Financials. Private-credit funds managed by Apollo Global Management, Ares Management and Blackstone will make up 12% of the index, which also includes insurers, regional banks and credit-card companies.

Investors in private-credit funds keep heading for the exits, partly driven by worries that the underlying assets might be overvalued. While private-equity funds haven’t undergone a similar flight, questions persist about their own valuation issues, Jonathan Weil writes for the Journal’s Heard on the Street column.

Generation Investment Management, an impact investment firm co-founded by former vice president Al Gore, has led a $100 million investment in Chapter, an AI-driven technology platform that helps older Americans navigate Medicare. Other investors that backed the transaction include new investors Fifth Down Capital and 8VC, as well as existing backers that include Stripes, XYZ Venture Capital, Addition, Narya Capital, Susa Ventures and Maverick Ventures.

The Sterling Group has completed its acquisition of Healthcare Linen Services Group from the private-equity team at York Capital Management. York invested in the Illinois-based healthcare-focused laundry-service outsourcing company in 2022.

Dallas-based lower midmarket firm Baymark Partners has acquired Katydid, a Dallas-based women’s apparel, accessories and gifts brand founded by entrepreneur Katy Messersmith.

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

Paine Schwartz Partners-backed Suja Life filed for an initial public offering to list its shares on Nasdaq, Elias Schisgall reports for Dow Jones Newswires. The company, which operates the Suja Organic, Vive Organic and Slice brands, didn't say how many shares it would offer or at what price. The company was acquired by the private-equity firm Paine Schwartz Partners in 2021. PSP would continue to hold a majority of Suja's voting shares after the IPO, the beverage company said in a Friday filing with the Securities and Exchange Commission.

Growth equity firm Edison Partners has agreed to sell its stake in Bindplane, a telemetry technology provider, to publicly traded Dynatrace. Edison initially invested in the company, which helps organizations capture and manage data, back in 2018 when it was known as ObserveIQ.

Leeds Equity Partners has raised $1.9 billion for Leeds Equity Partners VIII and related parallel vehicles. The new fund’s final tally exceeds the $1.4 billion that the firm raised for a predecessor vehicle back in 2021. Investors that have disclosed commitments to the new fund include the Connecticut Retirement Plans and Trust Funds and New Mexico Educational Retirement Board, according to WSJ Pro’s LP Commitments database.

Circulate Capital, a Singapore-based impact investor, has raised $220 million in an initial closing of Circulate Capital Asia II fund, the firm said on its LinkedIn profile. The first close surpasses the $188 million raised for Circulate Capital's first Asia fund.

Global growth private-equity firm Warburg Pincus is launching a European defense investment platform with backing from Munich Re’s asset management affiliate MEAG. In recent years, the firm has assembled a group of experienced senior advisers in the defense and national security sector. They include: Admiral Joachim Georg Rühle, former chief of staff of NATO’s Supreme Headquarters Allied Powers Europe; Susanne Wiegand, former senior defense, mechanical engineering and marine industries executive; Lieutenant General Jürgen-Joachim von Sandrart, formerly of the German army and NATO, and Rolf Wirtz, former defense executive and German armed services officer.

The Securities and Exchange Commission charged Florida firm Backswing Ventures and its owner, Kyle James Asman, with defrauding investors by charging excessive management fees. In its complaint, filed Thursday in a U.S. district court in Orlando, the SEC alleged Asman and Backswing – a venture-capital firm that invests in the defense sector – made misleading statements to investors between 2020 and 2023, and in one year collected over $500,000 in management fees, or over 23% of the capital committed to the firm’s fund. The regulator asked a court to impose a monetary penalty and require the defendants to give up the allegedly ill-gotten gains.

Blackstone has filed an initial public offering for Blackstone Digital Infrastructure Trust, an investment vehicle that will focus on newly-constructed, cash-flowing data-center properties leased to investment-grade hyperscale tenants, according to a regulatory filing. The listed vehicle is targeting data centers valued at between $250 million and $1.5 billion with expected asset yields of 5.75% to 7% or more, according to the filing. The listed trust will have priority over other Blackstone accounts in backing certain data-center investments for 24 months following the completion of the offering, the regulatory filing stated. Since 2018, Blackstone has invested in data-center and digital infrastructure worth around $200 billion across capital structures, including over $130 billion in data-center assets.

Ratings firm A.M. Best said in a report that the investment portfolios of insurers that sell annuities hold more risky debt than they did in 2007, the year before the worst downturn since the Great Depression. The ratings firm adds that annuity portfolios had a slightly smaller financial cushion in 2024—the most recent year for which data was available—than they did in 2007.

Ares Management’s credit secondary strategy has led the formation of a $2.5 billion continuation vehicle, including leverage, to acquire a portfolio of loans issued by Arcmont Asset Management in one of the largest European credit secondary deals yet, according to an emailed news release. The continuation fund’s portfolio will consist largely of first-lien senior secured loans from Arcmont’s 2019 vintage, Direct Lending Fund III.

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