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Family Offices Demystified | Ohio Pension Sets Investment Plans | Kinderhook Joins an Exclusive Club
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Good morning all. There are many opaque sectors in the private markets universe, but few are as shrouded as the family office constellations. And they are many. But Preeti Singh has found a way to shine some light into those dark corners.
In other news, Chris Cumming details an Ohio pension fund’s plans for the year and Laura Kreutzer has the details on the newest member of the billion-dollar fund club, Kinderhook Industries. All that and a wealth of other news from deals to Davos are laid out for you below, so please jump right in...
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Tony Pritzker, seen here at an event in Los Angeles last year, is chairman and chief executive of PPC Partners in Chicago, which invests on behalf of family offices. PHOTO: MATT WINKELMYER/GETTY IMAGES
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Family offices world-wide love private equity, and those in North America make the most investments in the asset class, WSJ Pro Private Equity's Preeti Singh reports. Almost 81% of family offices in North America invest in private equity as limited partners, fund-of-funds investors and independent investment sponsors, according to research from family office database provider Fintrx sponsored by Charles Schwab. Fintrx is owned by Cap Hedge Ventures in Rockland, Mass.
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The Ohio Police & Fire Pension Fund plans to make as much as $142 million in new private-markets commitments this year and approved its first one, of $20 million, to MBK Partners Fund V LP, a buyout vehicle managed by Seoul-based MBK Partners, WSJ Pro Private Equity’s Chris Cumming reports, citing a spokesman for the pension. The board of the Columbus, Ohio-based fund, which has $16.42 billion in assets, has invested about $1.36 billion in private markets, or 8.3% of its total assets and slightly above its 8% allocation target.
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Kinderhook Industries has joined the ever-expanding ranks of managers that have raised $1 billion funds with news that it has wrapped up its latest midmarket offering with $1.11 billion. Kinderhook’s partners and affiliates contributed $111 million, or 10% of the total, Laura Kreutzer writes for WSJ Pro.
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The number of North American buyout funds that closed in 2019 with $1 billion or more, up from 24 in 2015, Preqin Ltd. data show
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A copy of daily broadsheet newspaper Die Welt rests on top of a copy of daily tabloid Bild. PHOTO: KRISZTIAN BOCSI/BLOOMBERG NEWS
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Axel Springer, one of Europe’s largest media publishers, is going private in a deal led by KKR. The buyout firm, which currently holds a roughly 44.9% stake in Axel Springer, said Thursday it was beginning the process to delist the stock from the Frankfurt Stock Exchange. Shareholders will receive 63 euros a share, the price KKR paid Axel Springer’s minority shareholders last year. Friede Springer, widow of the media company’s namesake founder, and Chief Executive Mathias Döpfner will retain their shares. Together they control a roughly 45.4% stake.
Bain Capital plans to take private Showa Aircraft Industry Co. for 69.44 billion yen ($632.2 million), Kosaku Narioka reports for Dow Jones Newswires. Formed in 1937 as an aircraft manufacturer, the company now makes tank trucks and aluminum products and runs real-estate businesses. Showa parent Mitsui E&S Holdings Co. has committed to tender its 65.5% equity stake to Bain Capital under the deal, which would offer Y2,129 per share for Showa. A subsequent dividend would bring the deal’s ultimate value to Y2,760 a share.
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A Macquarie-backed blank check company, Boxwood Merger Corp., has secured financing from Blackstone Group Inc.’s GSO Capital Partners credit unit for its acquisition of Atlas Intermediate Holdings LLC, an Austin, Texas-based provider of engineering, testing and inspection services to governments and commercial enterprises. GSO will provide as much as $155 million through a private investment in public equity commitment to buy up to $145 million of preferred securities and $10 million of common stock in the Boxwood company that is acquiring Atlas. Also, Boxwood said Bernhard Capital Partners, a private-equity firm that formed Atlas in 2017,
has agreed to increase an equity rollover to as much as $50 million.
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Middle-market focused Gryphon Investors in San Francisco has acquired Ncontracts LLC, which makes risk-management and compliance software for the financial-services industry. The Nashville, Tenn.-based company received a growth equity investment from Mainsail Partners in May 2015 and that San Francisco-based firm still lists Ncontracts as a portfolio company on its website.
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TPG Growth, the growth equity investment arm of TPG, said it has agreed to acquire Denali Water Solutions from the company’s management and The Firmament Group. Denali Water Solutions offers organic waste management and environmental recycling services across the U.S.
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Riverside’s Riverside Acceleration Capital unit has invested in Australian educational technology startup Vivi International to assist the company’s U.S. expansion. Riverside Acceleration focuses on growth investments in expansion-stage software and tech companies.
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Hg has agreed to buy Intelerad Medical Systems Inc., a Montreal-based provider of medical imaging software and workflow systems, from Novacap Management and other investors, including employees. The London-based private-equity firm plans to invest in the business through its Hg Genesis 8 Fund, and company managers and employees also plan to reinvest in the business as well.
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Investment firms Galtney Partners and Regent Square Capital have acquired Generator Source LLC, a seller and services provider for standby generators. The firms bought the Brighton, Colo.-based company from founder Ed Vecchiarelli Sr.
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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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Permira stands to nearly triple its money on the partial sale of its stake in Duff & Phelps, Luisa Beltran reports for Barron’s, which is also published by Dow Jones & Co. Fellow private-equity firms Stone Point Capital and Further Global Capital Investment agreed to buy the company for $4.2 billion, reuniting Duff & Phelps with previous backers. However, Permira plans to retain a significant minority stake in the company, which it acquired in 2018 for $1.75 billion.
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Vista Equity Partners has agreed to sell risk-intelligence-technology company Regulatory DataCorp Inc. to Moody's Corp. for $700 million, Colin Kellaher reports for Dow Jones Newswires. The New York-based company provides clients with anti-money-laundering and know-your-customer data and due-diligence services and is expected to generate annual revenue of about $55 million this year. Vista acquired the business in 2016 from Bain Capital Ventures and others.
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Rhône Group has sold its remaining 17.6% stake in Italian electronics and appliance retailer Unieuro SpA for €45 million ($49.7 million), bringing total proceeds from its acquisition of the family-owned business to about €202 million since the company’s initial public offering. Under Rhône’s ownership, the retailer grew to 520 stores while revenue climbed to nearly €2.2 billion from €277 million when it was acquired, the New York-based firm said.
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Castanea Partners, Roark Capital Group and Partnership Capital Growth have sold Drybar Holdings LLC, a provider of hair-care products and salon services, to El Paso-based Helen of Troy Ltd. for about $255 million in cash. Castanea initially invested in the brand, with roots in Southern California, in 2012, while Roark made its first investment in the company in 2016.
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EQT is aiming to raise €14.75 billion ($16.31 billion) for its EQT IX private-equity fund, the Stockholm-based firm said Thursday in its fourth-quarter financial update. The firm also said that the €10.9 billion collected by predecessor fund EQT VIII was 70% to 75% invested as of Thursday, with commitments to businesses that include SHL Medical in Switzerland and Recover Nordic in Norway. EQT said it had €39.9 billion in assets under management at the end of last year.
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Secondaries and co-investment specialist StepStone Group has raised at least $120 million for its second China and Asia opportunities fund. The La Jolla, Calif.-based firm said in a regulatory filing Thursday that the first commitment to StepStone AZ China & Asia Opportunities Fund II LP was received on Jan. 8. StepStone has about $58 billion in assets under management and makes secondary and co-investments across private equity and debt, real estate and infrastructure.
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Huron Capital has hired Julia Kellogg as a partner to lead its human capital operations, including executive recruiting and development at the lower middle-market private-equity firm and its portfolio companies. She was previously the chief people officer at payments systems company North American Bancard Holdings LLC in Troy, Mich. Huron is based in Detroit.
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Publicly traded private-markets asset manager Hamilton Lane Inc. has promoted Jim Strang to a newly created role of chairman, of its Europe, Middle East and Africa (EMEA) business. The firm also moved up Richard Hope, a managing director on the firm’s secondary and co-investment teams, to assume Mr. Strang’s prior positions as leader of the EMEA team and head of the firm’s London office.
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EQT is weighing a sale of its private credit business, saying in its fourth-quarter financial update that the unit’s growth prospects lie along a path that would take it further away from its core business of actively owning assets. The Stockholm-based firm has retained JPMorgan Chase & Co. to help it evaluate strategic options for the business, which had €3.9 billion ($4.31 billion) in assets under management at the end of 2019.
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Carlyle co-chief executive Glenn Youngkin expects asset prices to continue trading at or around recent highs or possibly higher, Maureen Farrell reports for The Wall Street Journal. Companies have been trading at multiples of roughly 12 times on an earnings before interest, taxes, depreciation and amortization basis, Youngkin said. Carlyle will be very selective with future investments because of the high price tags, he said.
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Great Hill Partners-backed G/O Media, rocked by controversy over editorial management of online media site Deadspin, named veteran editor Jim Rich to take over the sports-focused property’s news operation, The Wall Street Journal’s Benjamin Mullin reports. Deadspin’s writers, editors and other newsroom staff quit the site in October in protest over changes ordered by G/O Media’s chief executive, Jim Spanfeller, who was brought in by Great Hill after it acquired the business earlier last year.
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Chinese privateequity firm CITIC Capital is actively bidding to buy out CITIC Ltd.’s 22% stake in the mainland China and Hong Kong businesses of McDonald’s, Reuters reports, citing Zhang Yichen, the chairman and chief executive of CITIC Capital. The firm and Carlyle Group Inc. invested in the restaurant chain alongside state-owned CITIC Ltd. in 2017. The three investors acquired 80% of McDonald’s China business.
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Bain Capital co-chair Steve Pagliuca defended the private-equity industry during a CNBC interview from Davos, Switzerland on Thursday. “Private equity, I think, has gotten a bad rap out there politically, but it’s actually a big part of the economy. It’s been a big success,” CNBC said in a report on the interview. “Private equity is not about cost cutting. It’s about growth,” he said, adding that Bain Capital-backed companies have collectively added 1.1 million jobs after the firm invested in them.
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Ted Bunker, Laura Cooper, Chris Cumming, Luis Garcia, Laura Kreutzer, William Louch, Preeti Singh, Chitra Vemuri.
Follow us on Twitter: @wsjpe, @LCooperReports, @LHVGarcia, @LauraKreutzer, @william_louch.
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