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Career Tips for Women Entering Private Equity | Peak Rock Bets on Infrastructure | Finra Expels Nyppex
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Good Monday morning to all. If you haven't registered for today's Women to Watch event at 11 a.m., there's still time to get in on it. Details are below. In connection with that discussion and the publication of our special report, our Laura Kreutzer and Luis Garcia offer some career tips gleaned from this year's honorees, designed for other women embarking on careers in private equity.
In other news today, Luis reports on Peak Rock's latest bet on utility infrastructure, this time through the buyout of Spatial Business Systems, whose software helps design and manage power grids.
Finally our Chris Cumming reports that Finra, the regulatory organization that oversees Wall Street, has expelled secondaries entrepreneur Laurence Allen and his Nyppex exchange from the securities industry. The ruling has been appealed.
We have these and many more stories condensed and linked for you bleow, so please read on...
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Staying focused on long-term objectives and nurturing personal networks are key to thriving in private equity, honorees in WSJ Pro Private Equity’s Women to Watch class of 2022 say. ILLUSTRATION: ISTOCK BY GETTY IMAGES
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Women have gradually made inroads into the ranks of private-equity professionals, although they remain only a small percentage of those at senior levels in the industry. Each year since 2015, WSJ Pro Private Equity has honored senior and rising leaders across the industry with our Women to Watch list. We asked some of this year’s honorees to share career-building advice for other women starting out in private equity.
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Private-equity firm Peak Rock Capital has acquired Spatial Business Systems LLC, a developer of network-design software for utilities and other infrastructure operators. The deal values the business at $100 million to $200 million, Luis Garcia reports for WSJ Pro Private Equity, citing people familiar with the matter. The company’s revenue rose more than 40% last year from 2020 and the business has been profitable, the people said.
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Wall Street’s self-regulatory body has barred Laurence Allen, who founded and managed a marketplace for private-equity secondaries as well as a private-equity fund, from the securities industry, Chris Cumming reports for WSJ Pro Private Equity. A Financial Industry Regulatory Authority Inc. panel found that Mr. Allen committed securities fraud when he tried to sell stakes in Nyppex Holdings, his Rye Brook, N.Y.-based secondaries marketplace, through false and misleading statements. The regulator said Mr. Allen failed to cooperate with its investigation. A lawyer representing Mr. Allen and Nyppex said they disagree with the decision and have appealed.
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Join us at 11 a.m. today for a members-only event to discuss how private-equity firms can foster female talent and how women can succeed in launching their own firms. Speakers include Leah Scanlan of Oak HC/FT, Amy Christensen of The Vistria Group, Michelle Dipp from Biospring Partners, Hollie Haynes from Luminate Capital Partners and JoAnn Price from Fairview Capital Partners. Sign up here.
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$2.97 Trillion
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The value of announced M&A deals this year through the third quarter, down 33% from a year earlier, Reuters reported, citing Dealogic data
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Evening falls in Paris, where Atos shares trade. PHOTO: PETER ADAMS / ZUMA PRESS
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London-based private-equity firm ICG PLC failed to convince leaders of French technology consulting company Atos SE to discuss a proposed acquisition of its Evidian unit, alongside Atos rival Groupe Onepoint SA. The proposal valued the Atos group at about €4.2 billion, or roughly $4.12 billion. On Thursday, Atos confirmed that it had received the proposal on Sept. 27 and decided not to pursue it. In July, Atos outlined a plan to break itself in two by creating Evidian and spinning it off
next year. The business generated revenue of about €4.9 billion last year with a 7.8% operating margin. Onepoint said under its proposal, Atos could retain up to a 30% interest in the Evidian business, which would have more than 60,000 employees following the proposed deal. Atos shares fell about 5.7% Friday to close at €8.16 each in Paris.
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Under pressure from an activist investor, pet-food maker Freshpet Inc. has hired bankers to explore a potential sale of itself, Luisa Beltran reports for sister publication Barron’s, citing two people familiar with the situation. Activist hedge fund Jana Partners recently took a 10% stake in publicly traded Freshpet, saying that it wanted to talk with company leaders about operational improvements and a potential sale, according to a regulatory filing. Freshpet, known for selling upscale pet food and treats, is undervalued and represents an attractive investment opportunity, Jana said.
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Vista Equity Partners and Elliott Management Corp.’s Evergreen Coast Capital Corp. have closed their $16.5 billion take-private deal for Citrix Systems Inc., wrapping up the nation’s largest leveraged buyout in more than a year after investment banks reportedly faced absorbing more than $500 million in losses tied to syndicating debt backing the transaction. The buyout will pay shareholders of the Fort Lauderdale, Fla.-based enterprise software company $104 per share in cash. The new owners are combining the
business with software and services provider Tibco Software Inc. in Palo Alto, Calif. The combined operation is part of Cloud Software Group Holdings Inc., along with several other related businesses. Cloud is based in Fort Lauderdale.
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Platinum Equity said it has acquired a controlling stake in clothing company Hop Lun (Hong Kong) Ltd. from founder Erik Ryd, who started the business in 1992. The Hong Kong apparel maker has more than 30,000 employees working in locations in Bangladesh, China, Ethiopia and Indonesia and is among the largest producers of undergarments and swimwear sold in the U.S., Britain and Europe. The deal, which was announced in June, was led from the Beverly Hills, Calif.-based firm’s Singapore office.
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A blank-check company backed by a fund of Forebright Capital Management Ltd., a private-equity firm in Hong Kong, is moving forward with a plan to combine with electronics component supplier O2Micro International Ltd., driving a 30% gain in the target company’s shares, Chris Wack reports for Dow Jones Newswires. In March, the Forebright New Opportunities Fund III LP’s special-purpose vehicle, FNOF Precious Honour Ltd., said its subsidiary, Rim Peak Technology Ltd., would pay $5 per U.S. share of the company, giving the deal an equity value of about $145.9 million. The terms represent a nearly 9.1% reduction in price from a $5.50 per share
proposal in March. O2Micro, which has operations in several Asian countries and the U.S., makes components that drive light-emitting diodes used in electronic displays and for device battery management.
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European insurer AXA SA’s AXA Investment Managers Alternatives, also known as AXA IM Alts, led a $32 million growth investment in CXL Ophthalmics Inc., according to a news release. The clinical stage Encinitas, Calif., company focuses on developing treatments for particular eye conditions. AXA said it invested in the Series A round through its Global Health Private Equity strategy and was joined by a number of individual backers, including cornea specialists.
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Oak Hill Capital is acquiring a minority stake in wealth-management company Kestra Holdings from Stone Point Capital, joining majority owner Warburg Pincus in backing the Austin, Texas-based business, according to a news release. Stone Point first backed Kestra, whose units oversee $122 billion in assets, in 2016. Warburg invested in Kestra in 2019, according to its website.
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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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Shore Capital Partners in Chicago said it has sold ophthalmology services group EyeSouth Partners to Olympus Partners, a private-equity firm in Stamford, Conn., that managed assets of $6.54 billion at the end of last year, according to a regulatory filing. EyeSouth has more than 270 doctors practicing in over 155 locations across 11 states. The company was formed by Shore Capital in 2017 in partnership with Georgia Eye Partners and its founder, Dr. Eugene Gabianelli.
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Bain Capital’s Alex Wu, an executive vice president, Asian Pacific private equity in Singapore, has stepped into the role of chief financial officer at publicly traded electric-vehicle infrastructure company NaaS Technology Inc., replacing Lei Zhao, who the company said stepped down for personal reasons. Mr. Wu took the post on an interim basis until a permanent successor can be found. He was previously interim CFO at the company’s predecessor business, Rise Education Cayman Ltd. He joined Bain Capital in 2017. Beijing-based NaaS, whose shares listed in the U.S. in June, provides charging services for electric vehicles in China. The company said it is a
unit of Newlinks Technology Ltd.
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The part of lower Manhattan where many deals originate. MIKE SEGAR/REUTERS
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Rising interest rates forced a pullback from deal financing amid geopolitical tensions, and the soaring dollar failed to spur offshore investments, leading to a third consecutive quarterly decline in global mergers and acquisitions this year, Reuters reports, citing Dealogic data. Third-quarter M&A activity plunged 54% to $716.62 billion compared with $1.56 trillion in last year’s third quarter, in terms of announced transactions, the data show. Through the first nine months of this year, deal volume has dropped 33% to $2.97 trillion, Reuters said.
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A Welsh, Carson, Anderson & Stowe portfolio company, U.S. Anesthesia Partners in Dallas, is under investigation by the Federal Trade Commission over whether it has amassed too much power in some regional markets through acquisitions, Dave Michaels reports for The Wall Street Journal, citing people familiar with the matter. The company has 4,500 anesthesia providers in nine states, including Texas, Colorado and Florida, growing through acquisitions of smaller anesthesiology groups and rolling them up into a consolidated entity that manages hospital contracts, billing, insurance agreements and other functions."The FTC's focus seems to be on USAP's acquisition history," a company
spokesman said, calling the probe "relatively common" in healthcare sectors.
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Hedge funds that bet on macroeconomic shifts have been a rare bright spot in a dismal market, racking up their highest returns in years on the back of some of the biggest interest-rate and currency moves in decades, Juliet Chung writes for The Wall Street Journal. So-called macro firms such as Bridgewater Associates and Brevan Howard Asset Management, which try to anticipate moves across financial markets such as the direction of interest rates, currencies, equities and commodities, are enjoying double-digit gains at a time when both stocks and bonds are swooning and gold has dropped, too.
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Finra, Wall Street’s industry self-regulator, has eliminated caps on fines that can be imposed on midsize and larger firms as part of an update of its guidelines for punishing misconduct, Kenneth Corbin reports for sister publication Barron’s. The new no-limit guidelines apply to nine common violations, including sales of unregistered securities, best execution, churning, and supervision failures. Previously, a $310,000 limit had applied. The changes, including higher fines and a new $5,000 minimum penalty, took immediate effect.
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Investment firm 3i Infrastructure PLC reported strong performance over its fiscal first half, with income exceeding expectations, Joe Hoppe writes for Dow Jones Newswires, citing a regulatory filing. The firm said that total income and non-income cash from its holdings rose to £73 million, equivalent to about $81.2 million and £25 million, respectively, for the six months ended Sept. 30, compared with total income of £56 million and no non-income cash in the same period last year. Much of the gain stemmed from inflation, power prices and exposure to mega-trends such as energy transition and digitalization, 3i said. Shares of the publicly traded firm rose about 5.4% in London Friday following the
report.
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The trial of Colony Capital founder Tom Barrack will hear from former Secretary of State Rex Tillerson on Monday as federal prosecutors press their case against the former fundraiser for Donald Trump, Reuters reported. Mr. Barrack faces charges of illegally acting as a foreign agent for the United Arab Emirates, which he has denied. Mr. Barrack’s lawyers have said that the State Department, and Trump himself knew of his contacts with Middle East officials, showing that Mr. Barrack didn’t intend to be a foreign agent. The defense attorneys have said Mr. Barrack’s interactions with Emirati officials were part of his role running his real-estate focused
private equity firm, now known as DigitalBridge Group Inc., and that there was no evidence he agreed to act at the UAE's direction. The trial is proceeding in New York.
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