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As dreadful as tax season may be, mention K-1s and you are sure to get a reaction. Investors can’t escape them. And as firms look to move beyond their traditional investor base, that means K-1s are coming for you. 

Tech investor Sumeru is striking while the iron is hot, acquiring Edison-backed K1x. Edison is joining in the latest cash injection, as I report.

Next, our Isaac Taylor reports that Ares is making an energy efficiency play, backing commercial property improvement financing provider Clearwater PACE.

And Ben Glickman writes for the Journal that private credit, for years the shiniest thing on Wall Street, has lost that luster. Morgan Stanley's Ted Pick says private credit is having a coming of age moment and still has extraordinary growth potential.

We have these and more. Please, read on …

Growth investor Sumeru Equity Partners acquired artificial intelligence-powered tax technology company K1x, looking to capitalize on private markets’ explosive growth and AI’s ability to drive big payoffs, WSJ Pro's Maria Armental reports. San Mateo, Calif.-based Sumeru led a $175 million investment in K1x, which spun out of accounting firm Crowe in 2022. Edison Partners, an earlier backer, also participated, while venture-capital firm Mudita Venture Partners used the deal to exit its investment.

Credit-focused Ares Management is backing Clearwater PACE with a commitment of up to $300 million for a vehicle that will boost the commercial property improvement financing provider's capacity to back investments in energy efficiency, WSJ Pro's Isaac Taylor reports. Clearwater, a unit of real-estate focused financing and services provider AXCS Capital, will use the new commitment to back property upgrades through state-sponsored energy-efficiency  programs that let property owners secure low-cost project funding.

A series of events has investors talking about bugs inside the $2 trillion private-credit industry, Ben Glickman reports for the Journal. Defaults and losses have sparked a debate about the quality of private-credit loans and the future of the industry. Some of the individual investors the funds were heavily marketed to are asking to get their money out—and finding out it can be hard to do so quickly.

Washington Harbour Partners led a more than $75 million investment in space infrastructure company Turion Space. Other new investors in the transaction include Center15 Capital, Magnetar, HOF Capital and Industrious Ventures. Turion offers spacecraft, sensors and software and plans to use the new capital partly to increase its spacecraft production capacity and to expand and enhance its non-earth imaging capabilities.

Healthcare specialist RA Capital Management and Deep Track Capital joined a $108 million growth investment round backing clinical-stage biotechnology business Terremoto Biosciences as new investors in the California company. Existing backers including OrbiMed, Novo Holdings and Cormorant Asset Management also participated.

Cerberus Capital Management has agreed to acquire LendCo from midmarket private markets firm Cabot Square Capital and other minority investors. Cabot Square and the private client group of financial services firm SPF established the London-based specialty lender as a joint venture in 2018 and since then the buy-to-let debt provider has lent nearly £3 billion, or $4.1 billion.

Midmarket-focused H.I.G. Capital has invested in Inventus Power, a Woodridge, Ill.-based provider of advanced lithium-ion batteries and power systems.

Finnish impact investor Finnfund is lending $15 million to Rohatyn Group-backed Toucan Forestal Panama to support its activities in Panama’s Darién region. The company operates teak plantations and restores natural forestation.

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

Family office TBG AG in Zurich is selling Megger Group to strategic buyer Esco Technologies for cash and stock in a deal valued at $2.35 billion, Elias Schisgall reports for the Journal. Megger, which provides testing, monitoring, and data solutions for utilities and infrastructure companies, is expected to generate revenue of about $590 million this year. The price represents roughly 14 times Megger's estimated pre-tax adjusted earnings for this year, including cost savings.

Partners Group and real estate investment firm Lingerfelt have sold their 1.16 million-square-foot Walthall-Northlake industrial real estate portfolio to an undisclosed buyer for $175 million. The two firms acquired the Virginia properties for $105.6 million in 2023.

Amazon.com-backed small modular atomic reactor developer X-Energy plans to sell nearly 42.9 million shares priced from $16 to $19 each in an initial public offering, a securities filing shows. Amazon, which is also an X-Energy customer as it outfits its data centers, holds a 29% equity stake in the Rockville, Md., business whose other backers also include uranium investor Segra Capital Management and Ares Management, the filing indicates.

Madison Dearborn Partners-backed defense technology and drone aircraft systems maker Aevex expects to sell 16 million shares priced from $18 to $21 each in an initial public offering to raise as much as $336 million, a securities filing shows. Madison Dearborn in Chicago first backed the Solana Beach, Calif.-based drone warfare systems developer in March 2020, according to the firm's website.

Accel has raised $5 billion for late-stage growth investments, saying that market changes driven by advances in artificial intelligence technology are creating opportunities to back the next generation of entrepreneurs. "In our view, this market cycle represents the early phase of a broader transformation," Accel said in an online statement that was signed by its partners. The fresh capital will let the firm support portfolio companies reaching late stages of development, according to the firm.

Vesper Infrastructure Partners in Milan has collected more than €1 billion, or about $1.18 billion, for Vesper Next Generation Infrastructure Fund I, surpassing the firm's €800 million initial target for the vehicle. The firm began raising the fund, its first, in 2023. So far, Vesper has backed six deals out of the now-closed fund, which it uses to invest in midmarket infrastructure businesses.

Afinum Management has closed on €500 million, or about $589.9 million, for its tenth flagship fund, the largest capital pool raised by the 25-year-old firm. Munich-based Afinum target buyouts of medium-sized companies in Germany, Switzerland and Austria. It was advised by Asante Capital Group for its fundraising.

Topspin Consumer Partners has raised $328 million for Topspin Consumer Partners III to back lower midmarket consumer brands, as well as consumer and retail business services, co-manufacturing, and technology and marketing services companies that serve consumer brands. The firm has already begun investing the fund, including in sports flooring and locker manufacturer Grid.

ACE & Co. in Geneva has raised $228 million during the first quarter and achieved initial or final closings of two separate funds. The firm held a final closing on $85 million for ACE Secondary Investments VIII targeting investments in limited partner-led secondary deals. It also held an initial closing of $143 million for ACE Independent Sponsors IV to back lower midmarket companies across the U.S. and Europe.

Buyout firm KKR & Co. has appointed Rob Shuter as an executive adviser to support the firm’s digital infrastructure efforts in Europe. Shuter previously served as chief executive of BT Enterprise from 2021 to 2023.

Energy-focused growth equity investor EIV Capital in Houston has named Mo Bawa as a partner. Bawa joins from Washington-based Acon Investments, where he was a managing partner who led investments across the energy and industrial sectors.

GoldenTree Asset Management has hired Ken Takao as principal and head of business development in Japan. Takao, who will be based in Tokyo, joins the firm from Fortress Investment Group, where he served as managing director in the product and client solutions group.

BTG Pactual Global Alternatives, an investment arm of BTG Pactual, has appointed Vincent Ingato as senior portfolio manager and Brian O’Leary as co-head of research within its performing credit platform. Ingato previously senior portfolio management roles at Jefferies Credit Partners, ZAIS Group and CVC Credit Partners. Meanwhile, O’Leary served as a managing director of leveraged finance at ZAIS Group.

Private credit is having a learning or sort of coming of age moment, Morgan Stanley Chief Executive Edward "Ted" Pick said during an earnings call with analysts on Wednesday. Despite elevated investor withdrawals, lenders, including private-credit funds, can be expected to perform while the economy is in the good shape it's currently in, he said, adding that the market has extraordinary growth potential.

New Mountain Capital is entering the business of offering insurance to insurers with the creation of reinsurer VictoryRe. VictoryRe has set up NovaRe, a collateralized reinsurance vehicle designed to provide capacity to Novacore, an independent, next-generation specialty insurance managing general agent.

Zouk Capital-backed EO Charging, an electric vehicle charging station supplier that operates as Juuce Limited, has been put in administration, the British equivalent of bankruptcy, with PricewaterhouseCoopers appointed the company's administrator. The move came after EO expanded into other parts of Europe, the U.S. and Australia. London-based Zouk has backed the company since at least 2018, when it unveiled plans to invest as much as £13 million, or about $17.6 million, in the business for a minority stake.

HarbourVest Global Private Equity, a London-listed vehicle offering investor access to private-markets investments managed by HarbourVest Partners in Boston, recently outlined steps it is taking to shore up its net asset values and enhance returns. HVPE said that even as its share price has reached record highs, it remains at a roughly 30% discount to NAV. One of the steps it plans involves a $400 million tender offer later this year priced at a discount to NAV of around 10%. In all, HPVE expects to distribute at least $500 million to shareholders this year, representing 12% of net assets.

Software investor Thoma Bravo has agreed with Alphabet's Google unit to provide Thoma Bravo portfolio companies easy access to the Gemini artificial intelligence inference engine through Google Cloud services. The agreement includes use of Google engineers to work on technical issues and the use of the company's marketplace and co-selling programs to reach new customers. Thoma Bravo's enterprise software companies will embed links to Gemini in their products as part of the collaboration.

Bain Capital has opened an office in Abu Dhabi to serve as a regional hub for its operations in the Middle East, Sebastian McCarthy reports for sister publication Private Equity News.

Banking firm PNC Financial has roughly $33 billion in exposure to private business lenders, including private-credit funds, Ben Glickman reports for the Journal. About $7 billion is in the form of loans to private-credit providers, a focus of jittery investors in recent months. The remainder, $26 billion, is in the form of trade receivables securitization and other asset-backed securitizations.

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

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