Good morning and welcome to the WSJ Pro Private Equity newsletter.

The artificial-intelligence boom may have slowed a bit in recent months, but private-equity AI investment is continuing to flow, as our Luis Garcia reports today. Renown Capital Partners is joining Nvidia and others in backing a company that uses AI to help manage the utilities grid.

Next, the Journal's Matt Wirz takes stock of the plight of "zombie buildings" in U.S. cities, offering as illustration a formerly Blackstone-owned tower in Chicago.

Now onto the news ...

Newly independent firm Renown Capital Partners led a $60.3 million growth investment in Utilidata, an Nvidia-backed company that seeks to use artificial intelligence to help power utilities deal with an increasingly congested grid, WSJ Pro’s Luis Garcia writes. Chip maker Nvidia also participated, joined by investment firm Keyframe Capital and energy-infrastructure engineering and construction company Quanta Services, according to Utilidata.

Private-equity firms that snapped up large office buildings—using money borrowed by issuing bonds called commercial mortgage-backed securities—are often writing off properties in ailing business districts, Matt Wirz reports for the Journal. That is leaving the buildings in the hands of bondholders, who sometimes duke it out to recover as much money as possible.

Alternative asset manager TPG is acquiring the hospitality industry software business of travel-sector technology provider Sabre for $1.1 billion in cash, Adriano Marchese reports for WSJ Pro. The firm is investing through its private-equity strategy and will set up the operation as a stand-alone business.

Investcorp has sold its stake in electrical services company RESA Power to Kohlberg & Co., according to an emailed statement. The Bahrain-headquartered investment manager did not disclose the value of the deal, but said the provider of power systems and services  had quadrupled its revenues since Investcorp first backed the company in 2021. The exit is the first from the firm’s inaugural North American buyout fund, which closed in 2023 with $1.2 billion of investor commitments.

President Trump’s embrace of digital currencies has unleashed a flurry of crypto deals, the Journal reported. This week brought the debut of Twenty One Capital, a new bitcoin company that plans to go public through a $3.6 billion merger with a special-purpose acquisition company led by Brandon Lutnick, son of Commerce Secretary and close Trump confidant Howard Lutnick.

Ardian in Paris is acquiring the rest of Hill Top Energy Center, a 620 megawatt gas-fired power plant in Pennsylvania, that it didn’t already own through a 2019 deal with Ares Management. The firm’s latest investment comes from its Ardian Americas Infrastructure Fund V.

Accel and Insight Partners co-led a $70 million growth investment in self-repairing software developer Lightrun, joined by others including Glilot Capital Partners, GTM Capital and Sorenson Capital, according to a LinkedIn post by company Co-founder and Chief Executive Ilan Peleg. The company’s products use live debugging techniques to make software that fixes glitches autonomously.

Comvest Credit Partners is leading the deal financing for One Equity Partners’ acquisition of aftermarket truck-parts company Wheeler Fleet Solutions from publicly traded VSE Corporation.

The investment-management arm of Prudential Financial provided $340 million in debt refinancing to solar and energy storage systems developer Nexamp, investing through its PGIM Private Capital credit operation. 

Lower midmarket-focused Avathon Capital acquired information-technology services provider OculusIT from ElevenX Capital, a manager of venture funds. 

Healthcare investor Oberland Capital Management has committed to invest as much as $600 million in senior secured notes issued by publicly traded clinical-stage biopharmaceutical company Biohaven, starting with a $250 million purchase set to close by Wednesday.

New Enterprise Associates led a $108 million growth investment in identity security company Veza, joined by several new venture investors as well as existing backers such as Accel and Blackstone. The deal valued Los Gatos, Calif.-based Veza at $808 million. The company is developing enterprise security products for customers that include Blackstone and student loan provider SLM, or Sallie Mae.

Performant Capital in Chicago is backing ophthalmology software supplier EyeMD EMR Healthcare Systems with a growth investment. The company’s technology is used to manage eye practices and maintain digital records.

Apis Partners and Vitruvian Partners led a $150 million growth investment in cross-border payments systems developer Thunes. 

Amberjack Capital Partners is backing heat-treating company Industrial Thermal Services in Nederland, Texas.

The infrastructure investment unit of Nordic asset manager CapMan has agreed to buy three data centers in Sweden from EcoDataCenter. Two of the data centers are located in Stockholm and the third is in the city of Piteå in Northeast Sweden.

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

Bruin Sports Capital and Quadrant Private Equity have asked bankers with Rothschild to explore a potential sale of specialty technology company TGI Sport, Sebastian McCarthy reports for sister publication Private Equity News in London. The firms first invested in the sports technology, media and marketing business in 2021, joining Australian buyout firm Quadrant in backing the business.

Copenhagen Infrastructure Partners in Denmark is selling a 50% interest in its Coalburn 1 utility-scale battery storage project in Scotland to the alternative-investment management arm of insurer AXA.

StepStone Group in New York closed its fifth flagship fund for investing in property-linked secondary deals led by general partners of other funds, closing StepStone Real Estate Partners V with $3.77 billion. The firm said the strategy’s investment capital rises to over $4.5 billion when co-investment and discretionary vehicles raised to invest alongside the fund are included. About $1.7 billion has been invested so far in eight deals. StepStone closed a growth-equity fund with $705 million last week and in September said it had collected $4.8 billion for its fifth private-equity secondaries vehicle.

EQ Asset Management has raised $168 million so far for its EQ PE XVII US fund, with plans to continue marketing the fund of funds through 2025. The firm, which is partnering with Chicago-based RCP Advisors, plans to back 12 to 15 midmarket and lower midmarket private equity funds in the U.S. and Canada as well as co-investments alongside the funds’ managers.

Allied Industrial Partners has closed its debut fund at its $300 million upper limit, above a $250 million target. Allied’s own senior team committed around 10% of the capital raised. Allied was formed in 2019 to target investments in growing industrial businesses. Before launching a fund the firm deployed more than $200 million of equity across five deals between 2019 and 2023.

Escalate Capital Partners, a private credit and growth equity firm based in Austin, Texas, closed Escalate Capital V with $350 million with commitments from investors that include J.P. Morgan Investment Management, TD Bank, Cadence Bank, Regions Bank and Truist Community Capital. Escalate, which targets investments in late-stage technology, software, services and healthcare, has already backed two investments out of the fund representing $35 million of committed capital.

Multi-strategy firm J.F. Lehman & Co. added Stanley Deal as a member of its operating executive board. He was most recently chief executive of passenger jet maker Boeing Commercial Airplanes.

Specialist investment firm Denham Capital added Paul David as an operating partner with its sustainable infrastructure credit business. He was most recently with Allianz in its global investors operations. 

Capital Dynamics in New York promoted Susan Giacin to senior managing director and head of Americas sales, leading the firm’s fundraising efforts. She is also joining the firm’s executive committee. Giacin joined Capital Dynamics in 2017.

Toyota Motor affiliate Toyota Industries received a proposal to take the company private, sending its shares up 23% to a record high Monday and giving it a market capitalization of about $34.11 billion, Kosaku Narioka reports for the Journal. The company said Saturday that it received various proposals, such as going private or improving its capital efficiency, which are being considered but nothing has been decided.

A tightknit coterie of associates of Elon Musk are quietly offering access to shares in private companies controlled by Musk, including SpaceX and Boring Company, by doling out stock through shell companies, racking up huge fees and profits in the process, The Wall Street Journal reports. Among them is Valor Equity Partners founder Antonio Gracias.

Fitch Ratings revised its view of the global leveraged finance market to deteriorating from neutral and expects a slightly higher rate of defaults in North America on leveraged loans at 5.5% to 6% this year and a meaningful increase in high-yield bond defaults to as much as 4.5%, both up from last year. In Europe, the rates of default are expected to be 2.5% to 3% for leverage loans and 5% to 5.5% for high-yield bonds.

The San Bernardino County Employees’ Retirement Association is weighing a $200 million pledge to a separate account mandate with Adams Street Partners to build a portfolio of first-, second- or third-time funds, according to pension documents. The Headwaters Fund, once approved, will target commitments of $20 million to $25 million each to eight to 10 funds with an emphasis on U.S. firms.

European buyout firm Mutares in Munich reported a 12% gain in group revenue to a preliminary total of €5.26 billion, or about $6 billion, and net income of €108.3 million, up about 5.7%, for fiscal 2024, both compared with 2023, saying final results would be delayed until next month because of “increased auditing and documentation requirements” stemming from “complex special circumstances” cited by Deloitte, the company’s auditor. Mutares said its partial exit of industrial equipment maker Steyr Motors and its sale of cold logistics company Frigoscandia provided boosts to earnings last year.

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

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