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Fundraising Swoons | Levine Leichtman Takes Succession Steps | AMC Nears Deal to Stave Off Ch. 11 | KKR to Buy Global Atlantic
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Good morning! Today we have more than the usual amount of news for a summer day, with deals aplenty, people moves and more on the Paycheck Protection Program recipient front. But those news items take a backseat to data on first-half fundraising, which our Chris Cumming reports fell sharply from 2019 levels. Also, our Laura Kreutzer has a look at the start of a changing of the guard at Levine Leichtman, where the co-founders are stepping back and promoting some insiders. WSJ Pro Bankruptcy’s Alexander Gladstone reports on a deal that may emerge soon to keep cinema operator AMC Entertainment Holdings Inc. out of a court-supervised restructuring that could affect Apollo and Silver Lake. And KKR struck a deal to buy Global Atlantic Financial Group Ltd.,
expanding its presence in the insurance business.
There’s much more below, so please dive in...
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Meetings that typically have brought together people for business or government purposes, like this one in St. Petersburg, Fla., have largely moved online, sometimes hampering the normal course of getting things done. PHOTO: JOSH SOLOMON/ZUMA PRESS
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Private-equity firms are having difficulty closing new funds in the time of social distancing and Zoom meetings, Chris Cumming writes for WSJ Pro Private Equity. The number of new funds to reach final closes fell sharply in the first half of the year, with the decline accelerating after the coronavirus pandemic caused governments to impose mass lockdowns late in the first quarter. Globally, 552 private-equity funds reached their final close in the first half of the year, 31% fewer than in the same period last year, according to data provider Preqin Ltd. At the same time, the total amount of money raised for private-equity deals showed a smaller decline, reflecting a long-term trend of investors
concentrating more of their dollars with fewer managers.
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Levine Leichtman Capital Partners has made a wave of promotions as husband-and-wife founders Arthur Levine and Lauren Leichtman prepare the private-equity firm for the next generation of leadership, Laura Kreutzer writes for WSJ Pro Private Equity. The midmarket-focused firm has promoted Matthew Frankel and Michael Weinberg to managing partners in charge of global investment activities, according to a news release. Andrew Schwartz, a partner who has been with the firm since 2011, has also been given an active role in managing investment team activities.
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AMC Entertainment Holdings Inc. is close to clinching a restructuring deal that would help stave off a near-term bankruptcy filing by the cinema operator while rejecting a competing financing offer from senior lenders, including Apollo Global Management Inc., Alexander Gladstone reports for WSJ Pro Bankruptcy, citing people familiar with the matter. The proposed deal, which could be announced within days, would require bondholders to provide a $200 million senior loan and swap their unsecured claims at a discount for new, second-lien debt, the people said. Silver Lake, which owns $600 million of convertible bonds, would swap for first-lien debt, the people said.
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$60.6 Billion
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The aggregate sum raised during the second quarter by 116 funds focused on North America, as global fundraising by private-equity firms fell to the lowest level since 2018's first quarter, Preqin Ltd. data show
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KKR & Co. said it has agreed to buy the retirement and life insurance company Global Atlantic Financial Group Ltd. in a deal that will boost the company’s assets under management, Dave Sebastian reports for WSJ. The private-equity firm said it would pay the amount of Global Atlantic’s book value as of the deal’s closing, through a combination of cash, proceeds from potential minority co-investors and debt or equity. Global Atlantic’s book value as of March 31 was about $4.4 billion, the companies said. The deal is expected to close in early 2021.
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Bluestem Brands Inc., the owner of the Fingerhut catalog, won bankruptcy-court approval to sell its assets to lenders led by Cerberus Capital Management, which agreed to forgive $250 million of the company’s debt.
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Global Infrastructure Partners has set up a $110 million term loan for port terminal developer Puerto Antioquia Holdings SAS in Colombia. The $725 million greenfield multipurpose port terminal, located on the northern coast of the Department of Antioquia, is owned by CMA Terminal Holdings SAS, the port operations arm of shipping company CMA CGM SA, construction company Eiffage SA, Colombia port operator Puertos Inversiones y Obras SAS, and a group of banana producers and exporters. GIP is making the investment through credit funds Global Infrastructure Partners Capital Solutions Funds I and II.
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Apollo Global Management Inc. has extended its partnership with investor and adviser Apeiron Management in Milan, increasing its support for a previously established investment platform by €100 million ($113 million), Elisângela Mendonça writes for sister publication Private Equity News in London. The firms established Apollo Delos in February 2018 to invest in special situations and corporate credit in Italy. So far, they have deployed €300 million across investments in corporate debt, receivables, special situations, insolvency compositions, and other stressed and distressed assets in the country.
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Veritas Capital, joined by Leeds Equity Partners, has combined Campus Management Inc. with the Campus Labs and iModules units of Edcentric Inc. to create Anthology Inc., a software provider to colleges and universities. Leeds sold software makers Campus Management and Edcentric to Veritas earlier this year, and said at the time that it would make a new investment in the companies alongside Veritas.
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London-based private-equity firm Hg has acquired a majority stake in F24, a pan-European emergency notification provider, for an undisclosed sum, Elisângela Mendonça reports for sister publication Private Equity News in London. The deal is expected to help accelerate F24’s international growth through a buy-and-build strategy, Hg said in a statement.
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The credit arm of Vista Equity Partners has led a $150 million debt financing for Afiniti Inc., a provider of artificial intelligence-based technology to help companies manage customer service and support, among other tasks. The Washington, D.C.-based company said it analyzes some 1.3 million interactions each day to refine its offerings.
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CI Capital Partners, a private-equity firm in New York, has set up a partnership with Paul Winnowski, a former president of residential solar energy company SunRun Inc., to acquire companies in that business and in the commercial security industry, where Mr. Winnowski was also a senior executive. The firm said the partnership aims to acquire companies that can form the basis of an effort to consolidate both industries.
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Kidd & Co., the private investment arm of the Kidd family office, and T-Street Capital announced a partnership to form Brand Holdings LLC, a direct-to-consumer e-commerce investment platform with a focus on health, wellness, sports nutrition, beauty and functional foods. The platform has also made its first acquisition with the purchase of Dr. Emil Nutrition, a portfolio of health and wellness supplements and sports nutrition products.
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Boston-based Abry Partners has acquired a majority stake in HealthEZ, a Minneapolis-based independent third-party distributor of self-funded medical plans for small and medium businesses.
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Kayne Anderson Capital Advisors has secured $118.5 million in financing for its utility-scale Harts Mill Solar project in Edgecombe County, N.C. through CIT Group Inc. Kayne Anderson is partnering with Birch Creek Development and Pine Gate Renewables to build the 112-megawatt project.
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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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Unfazed by the recession, venture firm Sequoia Capital has raised $7.2 billion for new funds to deploy in China, India and the U.S., Yuliya Chernova writes for WSJ Pro Venture Capital, citing people familiar with the situation. A spokeswoman for Sequoia confirmed the funds were closed.
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Charlesbank Capital Partners has raised $700 million for its second credit fund, confirming information in an earlier filing with the U.S. Securities and Exchange Commission. The firm said in a press release that the fund had a $500 million target.
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KKR & Co. is partnering with former Danaher Corp. executive William K. “Dan” Daniel to acquire an industrial business in the U.S., according to a news release. Following a buyout, Mr. Daniel and the firm will collaborate on achieving a breakthrough in the acquired company's operating performance and growth, the release said. In 14 years as a senior executive with Danaher, Mr. Daniel oversaw the company’s industrial technologies and life sciences operations, as well as its diagnostics and dental segments. He retired from Danaher in March.
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Clayton Dubilier & Rice has appointed Orla Beggs as a partner for human capital, according to a news release. Ms. Beggs is a former partner and head of the U.S. people and organization practice at PricewaterhouseCoopers LLP. She has been a member of the New York private-equity firm’s HR Council and has been an adviser to the firm on buyouts and other deals for 16 years. Her duties as a partner include driving people- and organizational-related initiatives to foster value creation at portfolio companies, the release said.
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Midmarket-focused Peak Rock Capital has hired Nicholas Basso as a managing director focused on credit investments, the Austin, Texas-based firm plans to announce today. He joins the firm from Oaktree Capital Management, where he was a managing director in the strategic credit group, which he helped expand from inception to more than $5 billion in assets under management, according to the release.
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Searchlight Capital Partners has added two new senior investment professionals to its team in London. The firm has hired James Redmayne as a partner and Giles Marshall as a managing director. Mr. Redmayne previously served as a senior managing director at CVC Capital Partners and worked in both the firm’s London and Hong Kong offices. Mr. Marshall joins from BregalFreshstream, where he was a director focused on investments across the industrial, leisure, business services and health-care sectors.
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Hanneke Smits, a former senior executive at Chicago-based Adams Street Partners, has been named chief executive of BNY Mellon Investment Management. Ms. Smits, who will succeed retiring CEO Mitchell Harris, has been CEO of BNY Mellon subsidiary Newton Investment Management since 2016.
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Private-equity veteran Tom Frost has been named head of the EMEA Insurance and Pension Solutions business of Voya Financial Inc.’s investment management group. Mr. Frost joins from Interitus Advisory, where he was head of business development for the EMEA region. In his new job, he reports to Charlie Shaffer, head of distribution, and John Simone, head of insurance solutions, and focuses on asset management services for pensions, sovereign-wealth clients and insurers.
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Kayne Anderson Capital Advisors LP has named Jon Levinson and J.C. Frey as co-heads of its renewables investment platform, as part of a continuing expansion into the sector. Mr. Levinson will lead the firm’s private renewable investments while Mr. Frey will oversee public strategies in the space, according to a press release.
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An RA Capital-sponsored blank check company, Therapeutics Acquisition Corp., plans to raise $100 million through an initial public offering to finance buyouts, with a focus on health-care and biotechnology companies in particular, according to a regulatory filing. Market volatility stemming from the coronavirus pandemic is likely to make going public by means of a special purpose acquisition company more attractive to early-stage drug developers and private health-care businesses, according to the filing. The company is led by Boston-based RA Capital founder Peter Kolchinsky. RA Capital had more than $4 billion of regulatory assets under management as of May 1, according to the
filing.
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The former U.S. operations of a sanctioned Russian bank, a hedge fund partly owned by one of the biggest private-equity firms in the world and a real-estate developer behind two of Manhattan's most expensive condominium towers were among the financial firms that benefited from a government program designed to help small businesses weather the coronavirus pandemic, Cezary Podkul, Juliet Chung and Will Parker report for The Wall Street Journal. The entities all received loans under the federal government's over $650 billion Paycheck Protection Program overseen by the Small Business Administration. The SBA in April said hedge funds and private-equity firms were ineligible to access the loan program because
they were "primarily engaged in investment or speculation."
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A fight for control of Luckin Coffee Inc. is hamstringing the embattled Chinese company, which has yet to release the results of a controversial shareholder vote on Sunday, Jing Yang reports for The Wall Street Journal. At Luckin’s extraordinary general meeting in Beijing, co-founder and Chairman Charles Lu asked shareholders to vote out himself and three other directors and replace them with two people he had nominated for newly open seats. Some shareholders saw it as an attempt by Mr. Lu to hang on to control of the upstart coffee chain via proxies. Two of the directors that Mr. Lu would have dropped are founders of private-equity firms that backed the company in its early days; the
other, Sean Shao, led an internal probe into Luckin’s accounting misconduct.
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