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Shamrock's Russo on Why Content is Still King | Investors See Uneven Valuation Reset
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Another week is drawing to a close, and investor optimism that the Federal Reserve will tap the brakes on the steady climb in interest rates seems to have buoyed stock markets. In our newsletter this morning, Maria Armental caught up with Shamrock Capital Advisors Partner Patrick Russo to talk about one of the faster growing areas of private investing: entertainment content and media rights. Shamrock is armed with a fresh $600 million fund to invest in content. Meanwhile, Maria also reports on some of the discussion from the recent IPEM private markets conference where the subject of valuations took center stage on several conference panels and where investors predicted the reset of valuations would be gradual and uneven.
There’s more on these and many other stories so dive in and have a great weekend.
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Shamrock Capital is based in Los Angeles. PHOTO: ALLEN J. SCHABEN / LOS ANGELES TIMES / GETTY IMAGES
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Shamrock Capital Advisors, a Los Angeles-based investment firm that traces its roots to the family office of the late Roy Disney, a longtime Walt Disney Co. executive, has raised more than $600 million to spend on entertainment content and media rights. Patrick Russo, the partner at Shamrock who focuses on the content investment strategy, spoke to WSJ Pro Private Equity’s Maria Armental about the changing dynamics in the world of content and the potential opportunities that lie ahead.
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Private markets deal makers and the investors who back them say pressure is mounting on the valuations of companies managers own. But that pressure is likely to affect some areas more quickly and dramatically than others. Investors and managers say valuations are likely to come down faster in the U.S., particularly in venture capital-backed tech startups, with potential write-downs in private equity likely to stretch over a longer period.
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WSJ Pro Event: Investing Through The Cycle
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Join us on Feb. 15 for a virtual webinar to discuss how limited partners view the investment outlook. In one panel, Sara Bowdoin from Siguler Guff will consider allocations while a second panel on finding diverse managers will feature Katie Moore from Hamilton Lane Inc. and Pamela Pavkov from TPG Inc. You can register here.
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64%
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The rate of decline in U.S. institutional leveraged loan volume last year, with collateralized loan obligations totaling $129.32 billion off about 31% from a record set in 2021, according to research provider S&P Global Market Intelligence
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Fiber-optic cables at a Telecom Italia telephone exchange in Rome. The Italian telco has received a bid for its infrastructure assets from KKR.ALESSIA PIERDOMENICO/BLOOMBERG NEWS
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KKR & Co. is reviving its effort to acquire assets of Telecom Italia SpA in Rome, as the company said the New York buyout firm had given it a nonbinding offer to buy the Italian utility’s fixed-line network, including its FiberCop broadband assets and a stake in Sparkle. In late 2021, KKR offered about $12 billion to buy the whole company, as The Wall Street Journal’s Stephen Wilmot reports. Including debt, that deal was valued at around $36 billion. KKR already owns 37.5% of FiberCop.
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Infrastructure investor DigitalBridge Group Inc. said it has acquired the equity investment management business of Sydney-based AMP Capital in a deal valued at $316 million plus possible future payments based on performance. The upfront price paid is less than the Boca Raton, Fla.-based buyer agreed to pay in April, when the transaction was announced. At that time, DigitalBridge said it agreed to pay AMP 458 million Australian dollars, then worth about $328 million, plus as much as A$180 million in future payments. At Thursday’s exchange rate, A$458 million is equivalent to about $326.9 million. DigitalBridge said it has renamed the acquired business as InfraBridge.
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Clayton Dubilier & Rice is negotiating to acquire publicly traded wealth management firm network Focus Financial Partners Inc. for a non-binding offer of $53 a share, according to a press release. Existing shareholder Stone Point Capital is considering retaining a stake in the company and providing new equity financing as part of the proposed deal, the release stated.
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Mutares SE in Germany said it has entered exclusive discussions to acquire French machined parts maker Walor International to add it to other steel parts manufacturers it owns. Munich-based Mutares said the Laval, France, company has more than 1,200 employees and generates over €200 million in revenue making forged and machined steel parts used in automobiles.
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GI Partners said it is backing rural internet service provider Rise Broadband and plans to make significant investments in the ISP’s infrastructure as the company pushes to install fiber-optic cables to its residential customers. Englewood, Colo.-based Rise serves areas in 16 states.
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Riverside Co.’s growth investment arm, Riverside Acceleration Capital, led a $20 million Series A deal to back software company Ziflow Ltd., joined by Companyon Ventures, according to a news release. Ziflow’s products are used in the development of creative work such as advertising and marketing materials through collaborative processes.
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Incline Equity Partners in Pittsburgh said it is backing Barefoot Mosquito & Pest Control, which specializes in environmentally conscious services. The growth investment is expected to help the Austin, Texas, company expand its market, according to a news release.
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Lovell Minnick Partners said it has agreed to acquire a majority stake in retirement plan administrator Definiti LLC. The company, based in The Woodlands, Texas, has more than 8,000 organizations as clients and advises some 10,000 retirement plans across the U.S., according to a news release.
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Leeds Equity Partners, a midmarket private-equity firm focused on education, training and information services, said it has acquired TalentNeuron from Gartner Inc. TalentNeuron offers human capital data and insights to corporations, government organizations and educational institutions and is the eighth platform investment out of Leeds Equity Partners VII LP, a $1.4 billion fund raised in 2021.
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Denver-based midmarket firm Platte River Equity is buying Womack Machine Supply Co., a Farmers Branch, Texas-based company that distributes components and other products for hydraulic, pneumatic and automation control systems, according to a news release.
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Rockwood Equity Partners is backing specialty excavation services provider NG Cos. through a growth investment, according to a news release. The Longmont, Colo.-based company helps clients locate buried utility lines and remove material.
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Growth investor American Pacific Group said it is investing in printing systems integrator Media One Digital Imaging LLC. The Garden Grove, Calif., company provides printing technology for use with textiles, large format projects and other special processes, according to a news release.
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StratCap LLC, a private investment firm, said it is examining strategic alternatives for assets held in its Strategic Wireless Infrastructure Fund LLC, including the possibility of selling wireless communication towers, easements and related assets. The firm said the fund holds more than 100 assets across the U.S.
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Trinity Investors and fellow real estate investor Avanti Residential said they have acquired and recapitalized a 184-unit multi-family property on 12 acres in the Denver suburb of Thornton, Colo., for $45 million. The firms said they plan $5.3 million in renovations.
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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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Inflexion Private Equity Partners in London is selling luxury travel business Scott Dunn Ltd. to strategic buyer Flight Centre Travel Group Ltd. in Australia at an enterprise value of £121 million, or roughly $149.7 million, according to a regulatory filing in Sydney. Flight Centre said the price represents 9.6 times Scott Dunn’s adjusted pre-tax earnings projected for the 12 months ending June 30. U.K.-based Scott Dunn arranges tours, cruises and other travel. The company was advised on the transaction by investment bank Harris Williams LLC. Inflexion acquired Scott Dunn in 2014, according to its website.
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Midmarket firm Round Table Capital Partners has sold its remaining shares in engineering design and services company Ardurra Group Inc. to an affiliate of Littlejohn & Co. Round Table Capital initially backed Ardurra five years ago, according to a press release.
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Oakley Capital in London said it has closed on €2.85 billion for its fifth main investment fund, equivalent to about $3.13 billion and surpassing a €2.5 billion target. The new vehicle is almost twice as big as its predecessor and brings the firm’s total assets to around €8 billion, according to a news release. The firm typically backs companies with enterprise values of €100 million to €500 million and has made three investments from the new fund so far.
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Fund-of-funds manager Cubera Private Equity, part of insurer and financial services company Storebrand ASA and run from Oslo, has collected the equivalent of more than $150.7 million for its Cubera X LP investment pool, a U.S. regulatory filing shows. The firm said in June last year that it had about €4.5 billion in assets under management, equivalent to about $4.95 billion.
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Lower midmarket firm Angeles Equity Partners said it has appointed Jake Blumental as a merger and acquisition partner in the firm’s operations affiliate to drive corporate development and add-on acquisitions across the portfolio. Mr. Blumenthal previously founded Cache Creek Industries, a private equity firm focused on the industrial sector.
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Infrastructure investment firm Global Infrastructure Partners said it has elected six new partners: Ari Droga, Ronnie Hawkins, Gregg Myers, Russell Smith, Virasb Vahidi and Adrian Witherow.
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Mozaic Capital Advisors said it has hired Stephen Emery, Charlene Sanna and David Wilson as vice presidents. Mr. Emery was most recently with Man Group PLC, while Ms. Sanna was with the Baupost Group and Mr. Wilson at Greenhill & Co., according to an emailed news release.
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Technology and telecommunications focused Siris Capital Group said it has promoted Tyler Sipprelle to partner at the firm. Mr. Sipprelle joined the firm in 2016.
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A pair of investors are paying $835 million for the Diplomat Beach Resort in Florida, a deal that would represent the biggest U.S. hotel sale during the Covid-19 pandemic period, Craig Karmin reports for The Wall Street Journal. Trinity Investments and Credit Suisse Group AG’s asset management arm have agreed to buy the Hollywood, Fla., property in a deal that could close as soon as Friday, according to people familiar with the matter. A sale of the 1,000-room oceanfront hotel would be the latest sign that resorts—particularly in Florida—remain in high demand. It would also be a big bet that corporate group travel can continue to gain momentum.
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FS Investments said it is merging with private markets advisor Portfolio Advisors to create a $73 billion alternative asset manager. The move will provide Portfolio Advisors’ products with broader access to wealthy clients through FS Investments’ distribution channels, according to a press release. Those products include Porfolio Advisors’ MVP Private Markets Fund, a registered private equity fund with more than $500 million in assets, the release stated.
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Multi-family office Pennington Partners & Co. in Bethesda, Md., said it is setting up a private-equity investment portal and hired Greg DeNinno to manage the new service, called Pennington Private Access. Mr. DeNinno was most recently managing director of investments for the Howard Hughes Medical Institute and its $27 billion endowment fund.
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