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SEC Fines Sciens | Hamilton Lane Reports Q1 Income Bump | KKR-Backed GenesisCare Preps for Bankruptcy
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Happy Friday! As we head into the Memorial Day holiday weekend, the news cycle often tends to slow and hopefully some of you will be able to get a day or two of rest and relaxation. For years now, our own Chris Cumming has followed the actions of regulators like the Securities and Exchange Commission as they focus on their radar more intently on private equity. This morning, Chris reports of an SEC settlement with private investment firm Sciens Diversified Managers related to an area that has attracted growing attention from the agency: valuation policies. Meanwhile, Ted Bunker gives us the skinny on Hamilton Lane’s quarterly earnings and our WSJ Pro Bankruptcy colleagues Alexander Gladstone and Soma Biswas have news that KKR-backed cancer-care services company
GenesisCare is preparing to file for bankruptcy.
Note to readers: WSJ Pro Private Equity will not publish on Monday in observance of Memorial Day in the U.S. We will be back on Tuesday. Enjoy the long weekend!
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The Securities and Exchange Commission said Sciens Diversified Managers failed to have proper valuation policies for a private-equity fund it managed.
PHOTO: ANDREW HARNIK/ASSOCIATED PRESS
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The Securities and Exchange Commission penalized Sciens Diversified Managers for not having a proper policy for valuing fund assets, a failure the regulator said can lead firms to overcharge investors for fund management fees, Chris Cumming reports for WSJ Pro Private Equity. The New York-based private-fund manager agreed to pay a $275,000 penalty and hire a consultant to review its policies for valuing assets and calculating fees under a settlement with the agency. “We take this SEC matter, like any SEC regulatory concerns, seriously and will always look for opportunities to improve our processes and procedures,” the firm said in a statement, without admitting or denying the
allegations.
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Asset manager Hamilton Lane reported an 8% increase in its adjusted net income for the just-ended quarter, as gains in fee-generating assets boosted earnings despite a 5% decline in its overall capital footprint, which includes money the firm invests directly and a much larger sum held under advisement, Ted Bunker reports for WSJ Pro Private Equity. The Conshohocken, Pa.-based firm said assets under management rose 5% from a year earlier to about $111.90 billion at the end of March, while assets under advisement fell 6.3% to $744.77 billion, with the combined total coming to $856.67 billion. The firm posted adjusted earnings of $51.6 million, or 96 cents per share, in the just-ended quarter, up 8% from
$47.6 million, or 89 cents a share, in the year-earlier period. Total revenue rose 12% to $112.8 million.
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GenesisCare, a provider of cancer-care services backed by KKR, is preparing to file for bankruptcy within days, WSJ Pro Bankruptcy’s Alexander Gladstone and Soma Biswas report, citing people familiar with the matter. The Australia-based company, which also operates in the U.S. and Europe, is in talks to receive roughly $200 million in new financing to see it through bankruptcy, the people said. GenesisCare is advised by lawyers from Kirkland & Ellis. China Resources Group is also an owner of the company. Representatives for GenesisCare, Kirkland and KKR didn't respond to inquiries seeking comment. China Resources Group couldn't be reached.
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Editor’s Note: Each week, we will share selections from WSJ Pro that provide insight and analysis we hope are useful to you. The stories are unlocked for The Wall Street Journal’s subscribers.
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Yield-curve pioneer Campbell Harvey believes an economic contraction could begin this month and last two to three quarters. “The question is how deep the recession will be,” he said.
Although AI offers benefits, some sectors are finding challenges. The tech was supposed to transform insurance; it hasn’t. And cybersecurity chiefs say the promises and risks of early generative AI are overblown.
Companies are facing more shareholder proposals from both sides of the political spectrum, dragging them into the increasingly fractious conversations over environmental, social and governance issues.
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28%
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The percentage of around 120 family offices surveyed by BlackRock that plan to increase their allocations to private credit in 2023, according to a report issued by the global asset manager.
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Shari Redstone’s National Amusements is the controlling shareholder of Paramount Global.
PHOTO: NIKKI RITCHER FOR THE WALL STREET JOURNAL
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Paramount Global’s controlling shareholder, Shari Redstone’s National Amusements, secured a $125 million investment from merchant bank BDT & MSD Partners, Jessica Toonkel writes for The Wall Street Journal, a cash infusion at a critical moment for the entertainment company. The investment comes just weeks after Paramount announced that it would be cutting its dividend for the first time in several years—a key source of income for Ms. Redstone and her family, The Wall Street Journal previously reported. Like its peers, Paramount is struggling to turn a profit as it grows its streaming business.
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TowerBrook Capital Partners said it is using its latest flagship fund to increase its investment in Infopro Digital Group, retaining control of the business with the company’s founder and management. The firm originally backed the company more than 15 years ago but exited in 2007, only to reinvest in 2016, when it became the majority shareholder, according to an emailed news release. The company, based near Paris, provides information and technology services to clients in sectors that include construction, government, automotive, insurance and retail, generating €550 million in revenue last year, equivalent to $591.3 million.
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Germany’s major soccer leagues, Bundesliga and Bundesliga 2, have dropped an effort to find an investor to inject cash in exchange for media rights to games, according to reports the league posted on its website, citing a league meeting Wednesday. The effort failed to garner sufficient support from the 36 clubs involved to move forward. At least one post identified the potential investors as Blackstone, Advent International and CVC Capital Partners, and put the prospective investment at about €2 billion, equivalent to $2.15 billion.
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Partners Group Holding in Switzerland said it is joining GHO Capital Partners in backing U.K. contract drug developer and manufacturer Sterling Pharma Solutions, acquiring a significant minority stake in the business. Additionally, GHO, also known as Global Healthcare Opportunities, is increasing its commitment to the company, which is also receiving investments from AlpInvest Partners and Pantheon, according to a news release. GHO first backed the company in 2019.
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Permira said it has agreed to acquire a majority interest in luxury goods manufacturer Gruppo Florence from VAM Investments, Fondo Italiano d’Investimento, Italmobiliare and the company’s founders, with all but Italmobiliare remaining as minority investors. Based in Milan, Italy, Florence represents a collection of 26 businesses that provide product development and manufacturing services to leather goods, clothing and shoe companies, according to a news release.
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Generation Investment Management led a 95 million Canadian dollars, or around $70 million, investment in BenchSci, an artificial intelligence-driven provider of technology for preclinical life sciences research and development, according to a press release. The investment brings the total amount of money the company has raised so far to CAD 218 million and was also supported with capital from existing investors that include iNovia Capital, TCV, Golden Ventures and F-Prime Capital, according to the release.
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Fullsteam, a payments and business-management software company owned by Aquiline Capital Partners since 2018 is receiving an investment from Aquiline and a unit of the Abu Dhabi Investment Authority, according to a press release. Aquiline will remain the lead investor in the company while ADIA will become a significant minority investor. In late 2021, Sixth Street Growth announced that it had backed a minority investment in Fullsteam, although the latest press release did not specify whether
the firm remains invested in the company.
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PSG Equity in Boston said it is backing services-management software company 4me, leading an unspecified growth investment in the business. The Palo Alto, Calif. company ‘s products are used to manage information technology services and other business operations, according to a news release.
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KKR said its European real estate platform has agreed to acquire a portfolio of 30 residential properties in Finland. The properties consist of more than 1,200 units with more than two thirds of the portfolio located in the cities of Helsinki, Turku and Tampere, according to a press release.
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Software-focused investment firm Insight Partners has led a $70 million investment in financial technology provider NYMBUS, according to a news release. Other investors that contributed to the deal include Nymbus clients ConnectOne Bank and PeoplesBank, as well as financial technology investors The Banc Funds Company and Mendon Venture Partners, the release stated.
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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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Onex Corp. has sold around 8.2 million shares of Ryan Specialty Holdings in a secondary stock offering that generated proceeds of around $355 million, according to a news release. Onex continues to hold about 4.1 million shares of the company’s Class A common stock, the release stated. Ryan Specialty Holdings is a provider of specialty products and services for insurance brokers, agents and carriers, according to the release. Onex initially backed the company in 2018 and made follow-on investments in each of the following two years, investing a total of around $305 million, before taking the company public in 2021, according to a press release issued at the time of Ryan’s initial public offering. Net proceeds to Onex at the time of the IPO were around $490 million, the release stated.
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Brazil-focused private-equity firm Patria plans to sell more than 32.6 million shares of Smartfit Gym and Dance School through a secondary offering, according to a notice to investors posted on the company’s website. Patria held a roughly 38% stake in the company as of March, with more than 224.4 million shares, according to a breakdown of major investors posted on its website. Other backers include the Canada Pension Plan Investment Board and GIC.
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Lower midmarket firm MPE Partners, formerly Morgenthaler Private Equity, is seeking $500 million for MPE Partners IV LP and a related parallel fund, according to a regulatory filing. The offering amount is modestly higher than the $420 million that Cleveland- and Boston-based MPE Partners raised for MPE Partners III LP back in 2020.
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Godspeed Capital said it has raised $250 million for Godspeed Capital Investment Program II, which the firm intends to invest in defense and government services businesses. The latest fund is about 61% larger than a predecessor vehicle that wrapped up in 2021, the firm’s first program. The emerging firm, founded by Douglas Lake after he left DC Capital Partners in October 2020, said it collected the new fund in less than six months and exceeded its $185 million target. Investors included the firm’s strategic partner, East Rock Capital, according to a news release.
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Vesey Street Capital Partners has added Heyward Donigan and Debbie Osteen to the lower midmarket healthcare-focused firm’s strategic advisory board, according to a news release. Donigan was most recently chief executive of Rite Aid, while Osteen is a retired chief executive of behavioral healthcare provider Acadia Healthcare, the release stated.
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Apollo Global Management in New York said Jon Beizer and Josh Brody would take over at recently established finance operation Cadma Capital Partners as chief executive and president, respectively.
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Salt Lake City-based Tower Arch Capital has added Madi Lang as vice president of business development at the firm, according to a press release. Lang previously worked at New State Capital Partners, where she focused on business development sourcing investment opportunities, the release stated.
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Venture capitalists are raising piles of cash to invest in healthcare—even as less of that cash is actually being put to work at startups, Brian Gormley writes for WSJ Pro Venture Capital. U.S. healthcare venture investors are standing firm in the belief that innovation in the life sciences, coupled with falling valuations, will in time pay off. In the first quarter, these investors secured $6.8 billion, a pace that exceeds that of 2022, when $21.8 billion was raised for the entire year, according to Silicon Valley Bank, now a division of First Citizens Bank. The tallies include healthcare-only funds and healthcare allocations of
diversified pools.
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