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Wellington Details Plans for CLOs | Shutdown's Impact | Schwarzman in Hot Water With English Neighbors

By Ted Bunker

 

Good morning and TGIF! Today our Isaac Taylor dives into derivatives with Wellington Management's Emily Bannister, who explains the $1 trillion-plus manager's strategy for CLOs.

Next, WSJ Pro's Venture Capital team offers a look at how the federal government shutdown might affect private-markets investing.

Finally, the Journal's Joe Wallace reports from southern England's chalk hills on how Blackstone's Steve Schwarzman got himself in hot water with neighbors of his sprawling manor there.

We have those stories and many more deals, including exits, fundraisings and more laid out for you below, so please fall in...

 
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Today's Top Stories

Wellington Management's headquarters is tucked away in a far corner of Boston's Financial District, near the Federal Reserve Bank of Boston and Fort Point Channel. PHOTO: SOPHIE PARK / BLOOMBERG NEWS

Investment manager Wellington Management has been an active participant in the collateralized loan obligation market for years and plans to continue investing in both the debt and equity side of the derivative structures, WSJ Pro's Isaac Taylor reports. The Boston firm's CLO operations include selling equity slices of the debt derivatives to investors. Emily Bannister, Wellington’s head of private credit, recently discussed the firm’s CLO plans with WSJ Pro.

The federal government shutdown that began Wednesday could throw a wrench in companies’ plans to hold initial public offerings after a pickup in new listings in recent months, WSJ Pro reports. Law firm Ropes & Gray said the reduced staffing at the Securities and Exchange Commission means the agency likely would suspend review of all IPO registration statements, including confidentially submitted draft registration statements. The shutdown might also revive long-held concerns that defense-tech revenue streams are risky, Geodesic Capital partner Tom Gillespie said. That could put a damper on efforts to get more cutting-edge technology into military hands.

Blackstone co-founder and leader Steve Schwarzman's English manor ambitions have gotten him in hot water with neighbors of his country estate, Joe Wallace reports for The Wall Street Journal. Local residents have tracked down providers of water to Schwarzman's sprawling property and complained that they are violating the spirit if not the letter of drought-forced restrictions. A spokeswoman for Schwarzman said the estate hasn’t violated any water regulations.

 
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Big Number

60%

The proportion of 196 financial advisers surveyed by Blackstone who said their clients have expressed more interest in private markets this year than last

 

Deals

Froneri generated revenue of €5.53 billion last year and swung to a pretax profit of €433 million. PHOTO: DENIS BALIBOUSE / REUTERS

The deal that brought in the Abu Dhabi Investment Authority and Goldman Sachs as Froneri investors alongside PAI Partners valued the ice cream supplier co-owned by packaged foods giant Nestlé at about €15 billion, or $17.6 billion, including debt, Dow Jones Newswires reported, citing people familiar with the matter. Goldman's alternatives arm led investors in a single-asset continuation fund to back Froneri through its Vintage Strategies while ADIA made a co-investment alongside PAI as the Paris-based firm restructured its 50% ownership in the Nestlé joint venture. Taken together, the new investments by PAI and ADIA total about €1.4 billion, two of the people said. The €3.6 billion, or $4.22 billion, transaction supports a company whose brands include Haagen-Dazs and generates revenue of €5.5 billion.

OpenAI has completed a deal with investors that values the ChatGPT maker at around $500 billion, the Journal reports, citing people familiar with the matter. That gives the startup a valuation on par with global corporate goliaths just three years after it began offering its flagship product. A group that included existing investors SoftBank Group and United Arab Emirates-based MGX paid about $6.6 billion to buy shares owned by OpenAI employees, the people said, finalizing a deal that began taking shape this summer.

New Enterprise Associates has taken private healthcare company NeueHealth at an enterprise value of about $1.47 billion. The deal paid stockholders $7.33 per share in cash, although some investors agreed to roll their holdings into the private company. Based in Doral, Fla., managed-care provider NeueHealth serves more than 600,000 people through clinics and partners.

The Canada Pension Plan Investment Board is investing $1 billion in AlphaGen, a collection of power plants assembled and overseen by ArcLight Capital Partners and joining the Abu Dhabi Investment Authority as a minority investor. ADIA previously committed $500 million to AlphaGen. The company manages U.S. plants with the capacity to produce more than 11 gigawatts of power.

Thoma Bravo is backing digital infrastructure investor SDC Capital Partners with a minority investment, funded from the technology buyout firm's balance sheet. The firm founded in 2017 by Todd Aaron also has engineering teams that "develop large-scale data center capacity for hyperscalers" around the world. The asset manager has made more than two-dozen investments globally since inception.

Strategic Value Partners is acquiring a 32% stake in Carroll County Energy, which operates a 700-megawatt natural gas-fired power station in Carrollton, Ohio. The deal is part of a strategic partnership formed in 2024 with EverGen Power.

Buyout firm TA Associates in Boston is acquiring a majority interest through a growth investment in accounting software provider FinQuery, joined by managers of the enterprise. The Atlanta company's applications are used by over 8,700 organizations to automate accounting functions.

Rockbridge Growth Equity is backing dispute resolution services provider Miles Mediation & Arbitration with a strategic investment. The Atlanta-based company operates across the southeastern U.S.

Private-credit firm Brightwood Capital Advisors is backing Motor City Dental Partners with capital to refinance existing debt and fund expansion. The Michigan company provides operational support to practitioners.

Technology investor Synacti has acquired a majority interest in Software Spinner, the maker of the MyExpatTaxes program used by Americans living abroad to manage their tax obligations and file their returns. London-based Synacti generally backs companies with revenue of £1 million to £10 million, or about $1.3 million to $13.4 million.

European technology investor Copilot Capital has acquired a majority interest in logistics company Zendr, whose software is used by more than 2,000 Nordic customers to manage freight shipments. The fresh capital is expected to fuel the company's expansion drive, which includes acquisitions.

Mutares in Munich has acquired the European business of aluminum window and façade systems designer and manufacturer Kawneer. The operations include sites in the Netherlands, France and the U.K. and employ over 400 people.

Maple Park Capital Partners is backing high-school sports-focused Prep Network. The Plymouth, Minn.-based company organizes and presents events that give young athletes exposure as they improve their skills.

Terramont Infrastructure Partners has acquired a majority stake in natural-gas compression systems provider Bull Moose Capital. The company mainly works with Canadian gas suppliers.

Invalda INVL Group and Accession Capital Partners are investing in Polish medical services company Polmed, joined by the World Bank's International Finance Corp. The investment will finance the company's expansion, including the acquisition of cancer treatment provider KN Group. Invalda is investing through its INVL Private Equity Fund II.

Avesi Partners is backing consulting company Mosaic Consulting Group with a strategic investment. The Nashville, Tenn.-based company works with clients in the healthcare, manufacturing and retail industries, among others.

 

Add-On Deals

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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Exits

Premium food for beloved pets has become a booming business. PHOTO: COVER IMAGES / ZUMA PRESS

Eurazeo has sold online pet food supplier Ultra Premium Direct to CapVest Partners-backed Inspired Pet Nutrition in a deal that returned double the Paris firm's cash investment. The transaction generated around €138 million, or $161.9 million, in proceeds that were allocated to the firm's balance sheet.

Wynnchurch Capital has acquired manufacturer Charter Industries, providing an exit for Incline Equity Partners in Pittsburgh. The Grand Rapids, Mich., company makes edgebanding used by casegoods makers for a variety of settings, from education and healthcare to commercial offices and retail stores. Incline first backed the business in 2018, according to the firm's website.

Growth investor PSG Equity is selling software supplier Versatile Credit to strategic buyer Synchrony. Boston-based PSG first backed the provider of point-of-sale technology to merchants and lenders in 2023.

Fort Point Capital has exited its investment in EventLink Holding, which has been acquired by Serata Capital Partners and Paceline Equity Partners. The company focuses on experiential marketing programs. Fort Point first backed the entrepreneur-led business in 2017.

 

Funds

Incus Capital in Madrid has collected half its €800 million, or $938.5 million, target for its European Credit Fund V, holding a first close for the vehicle. The firm has a €1 billion hard cap for the asset-based lending fund.

Lower midmarket-focused Blue Sage Capital in Austin, Texas, has closed on $287 million for its Blue Sage Strategic Credit Fund, barely nine months after closing on $618 million for its fourth flagship buyout fund. The firm surpassed its original $262 million upper limit for the new credit fund. At the end of last year, Blue Sage managed assets of about $991.2 million, according to a March regulatory filing.

Quantum technology investor 55 North in Copenhagen has raised €134 million, or $157.2 million, so far for its debut fund, anchored by Novo Holdings and the Export and Investment Fund of Denmark. The firm has a €300 million goal for the vehicle, which will back investments in computing, sensing and communication technologies.

 

People

Access Holdings in Baltimore has appointed Marc Porat as chief AI adviser to guide use of artificial-intelligence technology by companies held by the private-equity firm's funds. He is a co-founder and former chief executive of General Magic, an Apple offshoot.

Harrison Street Asset Management in Chicago has appointed Ivo de Wit as managing director of portfolio management, based in London, according to an emailed news release. He was previously with Goldman Sachs.

Sterling Group in Houston has added Dan Bucaro as a partner and operating executive. He has led a number of Sterling-backed companies and was most recently chief executive of PrimeFlight Aviation Services.

Halifax Group has added Dave Evans as an operating executive to work with portfolio companies and to help evaluate potential healthcare deals. He was previously chief financial officer of Halifax-backed PromptCare, which the firm has exited.

 

Industry News

Sixth Street Partners in Dallas is recapitalizing a collection of 37 assets owned by Clipstone Industrial REIT, forming the basis of a joint venture with industrial property investor Clipstone Investment Management to expand the real-estate investment trust's holdings. Overall, Clipstone manages assets of about £800 million, or roughly $1.1 billion, while Sixth Street oversees more than $115 billion.

Brookfield Asset Management has acquired a majority interest in fund manager Angel Oak Cos., which advises the publicly listed Angel Oak Financial Strategies Income Term Trust. The trust mainly invests in U.S. financial sector debt. Angel Oak said the change in control won't alter day-to-day operations. Shareholders approved the transaction on Sept. 26.

StepStone Group is working with U.K. insurer Aviva to offer private-markets investment opportunities to participants in Aviva's defined-contribution retirement trust-based savings plans. Stepstone is participating through its StepStone Private Wealth Solutions strategy. The listed firm manages $199 billion and oversees about $524 billion more.

The volume of broadly syndicated loans issued by U.S. lenders surged 21% in the third quarter from a year ago, rising to $845 billion, according to London Stock Exchange Group data. For the year's first nine months, lenders issued $2.54 trillion of the loans, which often finance corporate mergers and acquisitions. The figure represents a 9% increase compared with the first three quarters of last year. New money for leveraged buyouts rose 14% in the third quarter to $105.66 billion from $92.7 billion in the year-earlier period, LSEG data show.

The National Association of Investment Companies, a network of diverse and women-owned alternative investment firms, released a study showing that diverse ownership can make a significant difference in terms of investment returns. By one measure, such firms generated nearly double the performance of an industry median, NAIC said.

Eldridge Industries-backed Cain has shortened its name from Cain International and sharpened its focus on four strategies—property development, living and hospitality, supply-chain infrastructure, and sports and entertainment. The London firm started in 2014 by Jonathan Goldstein and Todd Boehly’s Eldridge currently manages about $13.8 billion with Goldstein as chief executive.

 
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About Us

Send us your tips, suggestions and feedback. Write to:

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

Follow us on Twitter:@wsjpe, @LHVGarcia, @LauraKreutzer

 
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