Good morning. Moody's Ratings thinks the push by private-credit firms into the struggling commercial-real-estate sector will help with liquidity but increases the sector's risks, Isaac Taylor reports for WSJ Pro.

Blue Owl is the latest private-funds manager to test the 401(k) waters, Miriam Gottfried reports for the Journal.

A new tax break slipped into President Trump's big tax-and-policy bill gives venture investors a new incentive to cash out on the secondary market, reports WSJ Pro’s Marc Vartabedian.

Now onto the news...

Moody’s Ratings says private-credit growth is adding risk to the U.S. commercial real-estate market, Isaac Taylor reports for WSJ Pro. As interest rates remain high and property values decline, private-credit lenders have stepped in to fill gaps in the CRE market, particularly for businesses that don’t meet banks’ lending standards. But the shift to private lenders also adds risk to the system, Moody’s says.

Blue Owl Capital is working with retirement-services provider Voya Financial to develop private-market investment offerings to 401(k)s and other defined-contribution plans, Miriam Gottfried reports for the Journal. Initially, the firms plan to develop target-date funds invested in private credit and real estate, mirroring Blue Owl pools tailored to wealthy individuals.

Tucked into the “big beautiful bill” signed by President Trump is a new incentive for shareholders of venture-backed startups to sell their shares on what is known as the secondary market. Investors don’t expect the change to trigger a stampede of sellers, but they say cashing out earlier is now a bit easier, WSJ Pro’s Marc Vartabedian writes.

Bain Capital and Kohlberg & Co. are leading a multibillion-dollar investment in PCI Pharma Services, joining Partners Group and Mubadala in backing the drug development specialist, Miriam Gottfried reports for the Journal, citing firm executives. The deal values Philadelphia-based PCI at $10 billion, including debt, according to people familiar with the matter.

A deal by TPG and Singapore's GIC to acquire energy meter company Techem from Partners Group last year for around €6.7 billion stumbled over regulatory concerns, leading Partners to remain as the company's controlling investor while bringing in TPG's Rise Climate strategy, GIC and Abu Dhabi-based Mubadala as co-investors. The new transaction gives the company the same enterprise value of roughly €6.7 billion, or about $7.83 billion, as the aborted sale. Partners private-equity arm, which acquired Techem in 2018 alongside Caisse de dépôt et placement du Québec and the Ontario Teachers' Pension Plan, is selling Techem to the firm's infrastructure strategy. La Caisse, as CDPQ is now known, and the pension are exiting with the deal.

Summit Partners is backing pathology lab technology company Dreampath Diagnostics with a growth investment.
The Strasbourg, France-based company focuses on automating and digitally transforming retrieval and archiving of tissue samples for customers that range from hospitals and research institutions to commercial laboratories and cancer-care centers.

JPMorgan Chase’s growth-equity investment arm has backed a previously announced $250 million investment in Island, a provider of enterprise workspace and application delivery technology. The transaction, which was led by Coatue Management, values Island at nearly $5 billion.

KKR’s Kairos Bidco investment vehicle agreed to buy the dermacosmetics branded business of publicly traded Perrigo for up to €327 million, or around $382 million. The purchase price includes €300 million upfront payment and up to €27 million in possible future milestone payments.

Midmarket firm HKW is buying Sepratech Liquid Solutions, an industrial water and wastewater treatment services provider based in Gonzales, La. Zach Nichols, an operating partner at HKW, will join the company’s team at the deal’s closing.

Growth investor FTV Capital is backing software company FundApps with a "significant" capital commitment, according to an emailed news release. The company's programs are used by financial institutions to ensure disclosure and position limit-monitoring regulatory compliance.

Battery developer TeraWatt Technology received a growth investment from Khosla Ventures and several new strategic investors alongside Temasek Holdings and JIC Venture Growth Investments, which had earlier invested in the company.

Quad Asset Management and DSC Investment were among the existing backers of Alzheimer's disease treatment developer Illimis Therapeutics that participated in a 58 billion Korean won growth investment in the company, equivalent to about $42 million.

SEVA Growth in Brooklyn, N.Y., is backing TitanFile, a Toronto company that makes software that allows law firms to transfer and share sensitive documents, with a minority investment, becoming the company's first institutional investor. 

Private asset-based lender Castlelake has agreed to buy consumer credit obligations totaling as much as $2.5 billion that would be issued by Pagaya Technologies through a new forward-flow agreement with a 16-month term. The new agreement more than doubles Castlelake's 2024 forward-flow deal with the Nasdaq-listed point-of-purchase lender, which had a potential capital commitment of as much as $1 billion.

Impact firm Mitchell Capital acquired a controlling interest in infrastructure software company Optelos, whose programs help industrial users create digital infrastructure models.

Private-credit firm Silver Point Capital is providing $85 million in financing for a joint venture set up by Great Point Studios and National Resources to be used as a bridge loan for refinancing a film-production studio in Yonkers, N.Y. 

Sun European Partners has acquired auto-repair chain Alton Cars in England. 

Buyout firm Mutares in Munich is acquiring the Lineage Spain Transportation operation of Lineage Group. The business, known as Fuentes, is based in Las Torres de Cotillas, Murcia, Spain, and is expected to generate revenue of about €200 million, or $233.8 million, this year.

Aurelius Investments in London agreed to acquire the information-technology business in the U.K. and Ireland of London-listed DCC for around £100 million, or roughly $134.9 million, Ian Walker reports for Dow Jones Newswires. In the 12 months ending in March, the operation generated revenue of £2 billion, with supply-chain financing of about £156 million and represented about 1% of continuing operating profit for sales, marketing and support services provider DCC, according to a regulatory filing.

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

Educational publisher McGraw Hill and consumer-intelligence provider NIQ Global Intelligence unveiled terms of planned initial public offerings that could give each of the private equity-backed companies a multibillion-dollar market capitalization, Dow Jones Newswires’ Colin Kellaher writes. McGraw Hill, owned by Platinum Equity, on Monday said it plans an IPO that would give the Columbus, Ohio, company a market capitalization of up to $4.2 billion. The market capitalization of NIQ, a Chicago company backed by Advent International and KKR, could top $7 billion.

Invalda INVL in Vilnius, Lithuania, is backing Romanian paper products company Pehart Group, providing an exit to private-equity firm Abris Capital Partners, which invested in June 2015. The World Bank's International Finance Corp. and local banks provided more than €150 million in financing for the deal, equivalent to about $175.3 million. 

Main Capital Partners in The Hague is selling a majority stake in digital identity-verification company Inverid to strategic buyer Signicat, which is backed by Nordic Capital. Main Capital first backed Inverid in 2022.

Boston-based BPEA Private Equity has rounded up at least $378 million so far for BPEA Strategic Healthcare II, according to a regulatory filing. BPEA’s healthcare strategy focuses on backing both funds and direct investments with an emphasis on small and midmarket opportunities, according to the firm’s website.

Greystone Industrial Partners has closed on $108.5 million in commitments for its first fund, according to a Securities and Exchange Commission filing. The firm was founded and is led by former Madison Dearborn Partners Managing Director Drew Macha.

Blackstone is adding Monica Issar to its multi-asset investing group as a senior managing director based in New York and reporting to Joe Dowling, the global head of the group. She joins from JPMorgan Chase's J.P. Morgan Global Private Bank.

Asset manager Monroe Capital in Chicago has appointed Dimitri Stathopoulos as head of business development - Americas. He was previously in a similar role with Nuveen.

Growth investor March Capital in Santa Monica, Calif., named Melissa Montan vice president of platform and marketing. She was previously an executive with HSBC Innovation Banking.

JPMorgan Chase Chief Executive Jamie Dimon says Wall Street’s hottest trend is a recipe for a financial crisis, but he’s investing billions to get in on it anyway, Alexander Saeedy writes for the Journal. His plan: swoop in strategically and profit if there’s a meltdown. The boom in unregulated lending to highly indebted companies has been sidelining big banks for years, and Dimon has said it reminded him of the craze in subprime mortgages that sparked the 2008 financial crisis.

The $556.48 billion California Public Employees' Retirement System's preliminary return for fiscal 2025 rose to 11.6%, beating a benchmark's performance by 1.7 percentage points. The results helped raise the nation's largest public pension's funded ratio, or the amount of assets it holds compared with promised benefits, to 79% from 75% at the same point last year. Returns on Calpers investments in private equity, at 14.3%, trailed only public securities, at 16.8%, for the year that ended June 30. The private debt portfolio delivered a 12.8% return.

Send us your tips, suggestions and feedback. Write to:

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

Follow us on Twitter:@wsjpe, @LHVGarcia, @LauraKreutzer