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Investment Firms Rule Wall Street | Hipgnosis Songs Fund Open to Formal Blackstone Bid | Cathie Wood’s ARK Funds Are Sinking Fast
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Good day Pro readers! Spring has officially arrived and here in Massachusetts, the daffodils are finally blooming. In this morning’s newsletter, our Wall Street Journal colleague Matt Wirz looks at how large investment firms have morphed into financial supermarkets with growing influence over the financial system and the economy. Meanwhile, one of those big investment firms, Blackstone, could get a board recommendation to acquire publicly traded Hipgnosis Songs Fund should the private markets giant submit a formal bid, Ian Walker writes for the Journal. And Cathie Wood’s investors are jumping ship, pulling a net $2.2 billion from ARK Investment Management's active funds this year, topping outflows from all of 2023, Jack Pitcher reports for the Journal.
Read on for more on these stories and so many more…
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KYLE ELLINGSON FOR THE WALL STREET JOURNAL
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Giant investment firms are taking over the financial system, Matt Wirz reports for the Journal. The largest of them, such as Blackstone, Franklin Templeton, BlackRock and KKR & Co., now control sums rivaling the economies of many large countries. They are pushing into new business areas, blurring the lines that define who does what on Wall Street and nudging once-dominant banks toward the sidelines. Today, traditional and alternative asset managers control twice as many assets as U.S. banks, giving them increasing control over the purse strings of the U.S. economy. Investors say this creates risks that markets have never encountered before.
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Directors of publicly traded music rights investor Hipgnosis Songs Fund, home to the catalogs of artists such as Neil Young, Shakira and Red Hot Chili Peppers, said they would be prepared to recommend to shareholders a Blackstone offer equivalent to $1.24 per share if the New York asset manager submits a formal takeover bid, Ian Walker reports for the Journal. On Saturday, Blackstone made a new approach that would value the business at about $1.5 billion, surpassing an offer from Apollo Global Management-backed Concord Chorus in Nashville, Tenn. Hipgnosis shares rose almost 12% to end at 102.60 pence each Monday in London, equivalent to about $1.27
each.
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Investors have pulled a net $2.2 billion from the six actively managed exchange-traded funds at Cathie Wood’s ARK Investment Management this year, a withdrawal that dwarfs the outflows in all of 2023, Jack Pitcher reports for the Journal Total assets in those funds have dropped 30% in less than four months to $11.1 billion—after peaking at $59 billion in early 2021, when ARK was the world’s largest active ETF manager.
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33%
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The percentage of deals outside of life sciences that included earnout provisions, up from 21% in 2022 and 18% in 2021, according to a study of mergers and acquisitions terms conducted by SRS Acquiom.
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Salesforce, based in San Francisco, specializes in cloud-based software that helps sales staff manage customer relationships. PHOTO: JUSTIN SULLIVAN/GETTY IMAGES
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A deal to take private software company Informatica fizzled before getting off the ground, the Journal reports. The Redwood City, Calif.-based company’s major investors include the Canada Pension Plan Investment Board and buyout firm Permira in London, a securities filing this month shows. Permira controlled almost 46% of the company’s shares while CPP Investments, as the group is also known, had nearly 29%, as of the end of March, the filing shows. Customer relationship management software supplier Salesforce had been in discussions with Informatica about an acquisition but couldn’t agree on terms, the Journal said. The deal would have valued Informatica
at around $10 billion. Informatica shares fell as much as 14% Monday, the first day of trading following the report.
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Apollo Global Management’s tie-up with Sony to bid for Paramount Global, which owns broadcaster CBS and the Hollywood studio behind classics such as “The Godfather,” might end up leaving everyone involved in Paramount with a better deal than it could manage with RedBird Capital Partners-backed production company Skydance Media, Jacky Wong writes for the Journal’s Heard on the Street. But Paramount and controlling investor National Amusements are engaged in a 30-day period of exclusive negotiations, which won’t end until next month. An Apollo-Sony bid could emerge shortly thereafter.
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Outdoor sports equipment, ammunition and accessories maker Vista Outdoor said in a securities filing Monday that it is engaging with family office MNC Capital over a $37.50 per share buyout offer, which the company rejected as too low in March, saying it expects a better offer to be forthcoming. The Anoka, Minn.-based company is also weighing a $1.91 billion deal to sell its ammo operations to Czech defense company Czechoslovak Group. MNC’s Mark Gottfredson, a Vista director until he
resigned in January, has said the firm’s offer would keep the company in one piece under U.S. ownership, removing the need for a federal review of a sale of national-security assets to an overseas buyer. Vista said it is now providing MNC with non-public data to facilitate its evaluation of the company’s worth.
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The growth investment arm of Bessemer Venture Partners, BVP Forge, led a $50 million investment in charitable giving facilitator Givebutter, joined by existing investor Ardent Venture Partners. The company works with foundations, public charities and other nonprofit organizations to keep them connected with past and prospective donors.
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German buyout firm Mutares in Munich said it has acquired property infrastructure company Greenview Group Holdings from Cordovan Capital Management in Belfast, Northern Ireland. Cordovan first backed the Belfast-based installer of heating and air conditioning systems about two years ago. Mutares said the company has around 190 employees and generated revenue of about €36 million, or $38.4 million, last year.
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Financial services provider Mandatum in Helsinki said its investment arm is investing in technology-focused HappySignals, joined by existing investors Nauta Capital and Vendep Capital in a €12 million growth investment round, equivalent to about $12.8 million.
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Siguler Guff & Co. and Haven Capital Partners are backing software distributor Cognitus with an unspecified growth investment. The Dallas-based company specializes in providing programs based on SAP SE software to its clients.
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Dutch growth investor Forbion Capital Partners and the HealthCap Advisor group operated by Odlander, Fredrikson & Co. in Stockholm led a $75 million growth investment in clinical biopharmaceutical company SynOx Therapeutics, joined by new investor Bioqube Ventures. The company is developing a treatment for certain types of cancer.
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Recently formed Forward Consumer Partners in Greenwich, Conn., said it has made its first acquisition from its debut fund, which closed in December with $425 million, buying artisanal bread and cracker maker Firehook Bakery. The firm invested in the Chantilly,Va.-based company alongside founder Pierre Abushacra, who retained a significant minority interest. Forward’s founding members include former L Catterton, Carlyle Group and KKR executives, and the firm says it invests in lower midmarket consumer brands with $25 million to more than $250 million in revenue.
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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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Midmarket European investment firm IK Partners in London is selling its majority stake in financial software maker Eres Group to Paris-based buyout shop Eurazeo. The company, backed by IK in July 2019, provides systems used to manage assets and employee profit-sharing plans from its head office in Paris and through more than 6,600 third-party distributors.
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Viking Holdings, a Bermuda-based cruise operator backed by the Canada Pension Plan Investment Board and TPG, fleshed out its plans for an initial public offering in New York, saying Monday that it expects to offer 44 million shares priced from $21 to $25 per share, with 33 million of the shares being offered by other sellers including CPP Investments and TPG. Both own stakes of about 31.5% of the company’s ordinary equity, or about 92.1 million shares each. Both owners would see their stakes drop to about 75.6 million shares each, or about 17.5% of the total outstanding, a regulatory filing shows.
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Multi-strategy firm Sterling Group in Houston said it has collected $3.5 billion for its Sterling Group Partners VI, exceeding the firm’s $2.75 billion target. Investors in the new vehicle included the $52.3 billion Illinois Municipal Retirement Fund, which committed as much as $75 million, according to the WSJ Pro Private Equity LP Commitments database. The latest fund is about 75% larger than its predecessor, which the firm wrapped up in 2020 with about $2 billion. The firm now manages assets of about $9.4 billion.
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H.I.G. Capital has raised at least $1.38 billion so far for H.I.G. Advantage Buyout Fund II LP, according to a regulatory filing. Investors that have disclosed commitments to the fund include the New Hampshire Retirement System and the Virginia Retirement System, according to the WSJ Pro Private Equity LP Commitments database. H.I.G.
closed the midmarket fund’s predecessor in 2018 with a total of $3 billion in aggregate commitments, including the general partners own commitments and certain co-investment vehicles.
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European asset manager EQT AB said it has appointed Peter Aliprantis as a partner and head of private wealth for the Americas, based in New York. He joins the firm from TPG’s Angelo Gordon unit.
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Performance Equity Management in Greenwich, Conn., said it has added Anita Sonawane as a principal and Sarah Condon as a senior associate, according to an emailed statement. Sonawane was previously with Bessemer Trust and Condon was previously with Goldman Sachs Group.
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Publicly traded private markets firm P10 in Dallas said it has added former Goldman Sachs Group Partner Tracey Benford to its board as an independent director. P10’s units include secondaries-focused Bonaccord Capital Partners and private-equity investment group RCP Advisors.
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Buyout firm CVC Capital Partners in London has priced its initial public offering with an implied market valuation of as much as €15 billion, or roughly $15.99 billion, Ian Walker reports for the Journal. The firm set a price range for its IPO of €13 to €15 per share and expects to list on the Amsterdam stock exchange. The firm pulled a previous IPO attempt in November, after the outbreak of war in the Middle East weighed on an already jittery market. CVC manages about €186 billion.
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The Federal Trade Commission on Monday sued to block the merger of two premium handbag makers, saying the deal would give the combined business too much power in the market for accessible luxury goods, Suzanne Kapner reports for the Journal. In blocking Coach owner Tapestry’s $8.5 billion acquisition of rival Capri Holdings, owner of the Michael Kors brand, the antitrust agency is also taking aim at their combined power as an employer. It said the deal could negatively affect wages and workplace benefits. The combined business would have roughly 33,000 employees, the agency said.
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Brookfield’s property group is among a group led by brand-management firm WHP Global that would acquire stores operated by apparel retailer Express, which has filed for chapter 11 bankruptcy protection, Colin Kellaher reports for WSJ Pro Bankruptcy. The troubled retailer based in Columbus, Ohio, said it plans to close about 95 of its namesake retail stores, along with all of its UpWest stores, as part of the bankruptcy process. The company had 600 total stores as of late October, including 529 Express stores, 12 UpWest stores and 49 Bonobos locations. The WHP-led group, which includes shopping mall operators Brookfield Properties and Simon
Property Group, has made a nonbinding proposal to buy a substantial majority of the company’s retail stores and operations.
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Secondary investor Bonaccord Capital Partners said it is backing Lead Edge Capital through a minority investment in the software focused growth investment firm. Based in New York, Lead Edge said last month that it managed $4.78 billion at the end of the year.
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Deerpath Capital Management said it has closed its Deerpath CLO 2024-1 collateralized loan obligation with $452.61 million. The firm said the deal represents its 10th CLO to close in the past six years, providing senior debt financing to North American lower midmarket companies. Deerpath said it now manages about $3.2 billion in CLO assets.
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