Welcome back to the working week! Chris Cumming of WSJ Pro kicks things off with a story about the plans of venture-capital firm General Catalyst to transform a loss-making Ohio hospital system into a model for high-tech healthcare.

Last Friday saw the sentencing of the leaders of GPB Capital Holdings, found guilty last year of a $1.8 billion private-equity fraud targeting thousands of everyday investors. Ted Bunker reports on how it went down. 

Also, the Journal reports that some of the largest U.S. foundations are joining together to protect their tax-exempt status as the Trump administration threatens the position enjoyed by nonprofits generally and targets college endowments.

Now onto today's news...

Venture-capital firm General Catalyst wants to transform a money-losing nonprofit hospital system in Akron, Ohio, into a revolutionary new model for high-tech healthcare, WSJ Pro’s Chris Cumming writes. But the startup investor’s ambitious plans for Summa Health must overcome a number of hurdles, including securing approval from state regulators at a time of public anger over private equity’s role in the dysfunctions of the U.S. healthcare system. Ohio Attorney General Dave Yost and other state officials are reviewing General Catalyst’s proposed $485 million acquisition of Summa, which employs about 8,600 workers across some 25 facilities in northeast Ohio.

A federal judge ordered prison time for the architects of the biggest private-equity fraud since the collapse of Abraaj Group in 2018, sentencing both Friday for their roles in setting up GPB Capital Holdings and marketing its funds to everyday investors with promises of earning 8% returns, WSJ Pro’s Ted Bunker reports. Former GPB Chief Executive David Gentile, an accountant who came up with the idea for the firm with auto dealer Jeffrey Lash and securities salesman Jeffry Schneider, was ordered to serve seven years by U.S. District Judge Rachel Kovner in Brooklyn, N.Y. She also sentenced Schneider to six years.

Some of America’s wealthiest and most powerful private foundations are informally banding together to protect their tax-exempt status from any potential attempt to revoke it by the Trump administration, the Journal reports. Grantmakers across the political spectrum, including the Ford Foundation, the Gates Foundation and the Charles Koch Foundation, are discussing possible ways to respond should the administration make such an attempt, said people involved in the effort. Many of the foundations have discussed whether to seek legal representation as a class or individually should their tax status come under fire.

Blackstone is backing a buyout of digital services and customer experience company TaskUs alongside company founders, paying $16.50 a share in cash for the roughly 61,400-employee business, Denny Jacob reports for Dow Jones Newswires. The price represents a nearly 15% premium to the stock’s close Thursday on the Nasdaq stock market. Blackstone controlled roughly 65% of the company’s voting power as of April, a securities filing shows. Co-founders Bryce Maddock and Jaspar Weir, the New Braunfels, Texas, company’s chief executive and president, respectively, each held about 16%.

Macquarie Group is buying SP Smart Meters Asset in the U.K. from Spanish energy company Iberdrola for £899.7 million, or about $1.19 billion, investing through its specialised and asset finance arm, Adam Whittaker reports for the Journal. Iberdrola holds the smart meter rental business through its Scottish Power unit. Macquarie said it aims to expand the operation in the U.K. through an agreement with the Scottish utility.

Sands Capital, GIC and the alternatives arm of Goldman Sachs joined other investors including Baillie Gifford and existing backers in a $450 million growth investment in software developer Rippling in a deal that valued the San Francisco-based company at about $16.8 billion, according to founder and Chief Executive Parker Conrad. Legally named People Center, Rippling uses artificial intelligence technology in its programs that are used to manage employee data and evaluate worker performance, among other things.

Canadian pension investor Caisse de dépôt et placement du Québec and investment firm Nuveen provided a $650 million credit facility to Redaptive, a developer of projects that help businesses improve their energy efficiency. Denver-based Redaptive plans to use the financing to expand its energy-as-a-service offerings, including heating and cooling, lightning and metering systems as well as solar power and battery installations.

Elliott Investment Management is in talks to buy a stake in a package of infrastructure assets, including a pipeline that carries Russian natural gas to Europe—a deal that could form a template for reviving Moscow’s once-mighty energy business by involving American investors, The Wall Street Journal reports, citing people familiar with the matter. The West Palm Beach, Fla., firm is considering a stake in the Bulgarian extension of the TurkStream pipeline, along with access to a network of data centers, data cables and other infrastructure assets, according to the people.

Newly established Content Partners Capital is backing entertainment company Relativity Media with a growth financing. Relativity plans to invest around $100 million to acquire film rights within five years, both for theatrical release and for its media library. Content Partners Capital, led by partner Alphonse Lordo, is the private financing arm of entertainment investment firm Content Partners.

Hayfin Capital and Peugeot Invest are joining Charterhouse Capital Partners in backing European healthcare education company Novétude Group, with Charterhouse retaining a majority interest. The firm has backed the business since 2020.

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

The midmarket private-equity strategy of Onex Corp. is selling minority stakes totaling 25% of Canadian airline operator WestJet to strategic buyers Delta Air Lines and Korean Air for a total of $550 million, Pierre Bertrand reports for Dow Jones Newswires. Delta is paying $330 million for a 15% interest while Korean Air is paying $220 million for 10%. Toronto-based Onex first backed WestJet in December 2019, according to the firm’s website. The firm will retain a controlling stake in the Calgary-based carrier.

Australian financial giant Macquarie is aiming to wait out current market volatility before divesting any more renewable-energy assets, Stuart Condie reports for the Journal. Macquarie’s asset-management arm lifted annual profit 33% in the group’s last fiscal year, divesting offshore wind farm stakes in the U.K. and Taiwan in that period. Global-market uncertainty sparked by U.S. trade tariffs means those might be Macquarie’s last sales of that type for a while.

TruArc Partners has raised around $1.04 billion for its fifth fund targeting midmarket businesses in the specialty manufacturing and business services sectors, according to a regulatory filing. The New York-based buyout shop makes investments of between $50 million and $150 million in businesses with an enterprise value of up to $500 million, according to its website.

GoldenTree Asset Management has wrapped up its $350 million GoldenTree Loan Management US CLO 25 collateralized loan obligation, bringing the total amount issued by the firm in the form of CLOs to $17 billion.

Morgenthaler Private Equity has promoted Joshua Liebow to partner. Liebow joined the Cleveland- and Boston-based private-equity firm last year after more than 20 years with Manulife Investment Management.

Medicare beneficiaries who undergo surgery in hospitals held by private-equity firms are more likely to die within the following 30 days than those getting the same operations in hospitals that aren’t controlled by private equity, Brett Arends writes for sister publication MarketWatch, citing a study in medical journal Health Affairs. Researchers studied 298,000 surgeries performed on Medicare beneficiaries at 701 hospitals across the country between 2011 and 2020, including 67 hospitals held by PE firms.

Private-equity and venture-capital deals were down in April compared with the same period a year ago, according to S&P Global Market Intelligence. The financial data provider tallied $38.52 billion of deals in the month, a $41.6% decline on $66.01 billion in April 2024. The number of announced deals also dropped to 957 from 1,125 in the same period a year ago. The two largest deals to be announced in April had KKR as the buyer: the $3.10 billion acquisition of financial software company OSTTRA Group and the $2.73 billion acquisition of Karo Healthcare.

Mideast private-markets investment firm Lunate and BlackRock are working with Abu Dhabi-based investment company International Holding Co. to set up a reinsurer driven by artificial-intelligence technology to assess risks. The firms plan to pursue a buy-and-build strategy for the business with a goal of reaching more than $10 billion in initial liabilities. BlackRock is providing a minority investment to the operation, which is expected to have initial equity commitments of over $1 billion.

Onex Corp. accrued net earnings of $168 million in the first quarter of this year, compared with $10 million in the same period of 2024. The Toronto investment manager raised $2.5 billion of fee-generating capital in the quarter, and held final closes on a $1.2 billion flagship private-equity fund and a $1.3 billion lower midmarket fund.

Midmarket borrowers, who often rely on private-credit financing, could see greater impacts from U.S. tariff policies than the expected effects on loan issuers, according to a report from S&P Global Ratings, citing accelerated inflation, weaker demand and lower investment rates. One upshot could be higher default rates, reversing recent trends, the ratings company said.

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