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Texas Teacher’s Bittersweet Moment | Blackstone’s Banner Quarter | Sema4 Takes the SPAC Track
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Good morning and TGIF! We’re closing out another week of frenetic dealmaking, exits, fundraising and more. With records falling left and right, it’s scarcely surprising to learn that prices for prime residential real estate in enclaves like Palm Beach are soaring thanks in no small part to New York financiers. As developer Patrick Carney noted to The Journal’s Katherine Clarke and E.B. Solomont of the 70% to 100% price increases: “Nothing goes up forever, except taxes.” Investors take note.
But don’t echo that sentiment to Blackstone’s Steve Schwarzman. Commenting on a knock ’em dead second quarter, the firm co-founder said: “Our forward momentum has never been stronger,” as Miriam Gottfried reports for The Journal. A Blackstone-backed life sciences company, Sema4, will test market sentiment today as it begins trading on the Nasdaq stock market after combining with a Casdin Capital-backed SPAC, as our Maria Armental writes.
Finally, our Preeti Singh details the challenges created at a big Texas pension system as a quarter of its private-equity investment professionals move on. Yet that churn has been tempered by stellar returns, particularly in venture capital. We have these stories and many more summarized below, so please read on ...
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A sign marks the headquarters of the Teacher Retirement System of Texas.
PHOTO: TEACHER RETIREMENT SYSTEM OF TEXAS
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The private-equity investment team at the $180.5 billion Teacher Retirement System of Texas is having a bittersweet moment, Preeti Singh writes for WSJ Pro Private Equity. The system’s private-equity portfolio produced the highest returns ever, yet turnover in its investment team created its “biggest challenge” over the past year as some of its professionals found higher-paying jobs elsewhere, according to Neil Randall, director of private equity. The Texas pension’s $29.84 billion private-equity portfolio produced a net internal rate of return of 56.7% over the 12 months through March, including venture holdings.
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Shares of Sema4 Holdings Corp, a genetic-testing and health-data analytics business spun out of the Mount Sinai Health System, are set to start trading Friday after the business combined with a blank-check company backed by Casdin Capital and Corvex Management, Maria Armental writes for WSJ Pro Private Equity. Investors in the special-purpose acquisition company, CM Life Sciences Inc., agreed to a deal that values the company at about $3 billion, a spokeswoman said. Backers of the Stamford, Conn.-based business include Blackstone Group Inc. and Deerfield Management, regulatory filings show.
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Blackstone Group Inc.’s assets under management climbed 21% to $684 billion by the end of June, helped by inflows of $37.3 billion in the second quarter, Miriam Gottfried reports for The Wall Street Journal. The New York-based firm’s net income more than doubled in the just-ended period to reach $1.31 billion, or $1.82 per share, helped by the firm’s emphasis on backing fast-growing companies in sectors such as information technology and life sciences.
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Since 2015, WSJ Pro and our sister publication The Private Equity Analyst have published our annual Women to Watch list in recognition of the outstanding achievements of female dealmakers, fundraising professionals and limited partners across the private-equity and venture capital industries. We are accepting nominations for this year’s list until Aug. 13. Please click on the link below to submit your nomination! We will announce this year’s list in early October.
Submit your nomination here.
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$196.53 Billion
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The value of 93 de-SPAC deals this year through Thursday, or nearly twice the value of 87 similar deals in all of last year, according to Dealogic data
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An Uber self-driving ride-hailing car and a self-driving freight truck, shown in 2017.
PHOTO: HANDOUT/REUTERS
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TPG Capital is selling Transplace to the freight unit of Uber Technologies Inc. in a cash and stock deal worth about $2.25 billion that extends the ride-hailing giant's reach into the U.S. domestic shipping sector, Paul Page writes for WSJ Pro’s Logistics Report. Uber is paying $750 million in its common stock and the rest in cash for Transplace, a technology-focused logistics services provider that TPG acquired from Greenbriar Equity Group for $1 billion in 2017.
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Blackstone Group Inc. and RidgeLake Partners are investing in midmarket-focused buyout shop Sentinel Capital Partners, taking minority stakes in the firm. Backed by Ottawa Avenue Private Capital and an affiliate of New York Life Insurance Co., RidgeLake specializes in acquiring minority stakes in private-equity firms. Blackstone is participating in the transaction through its GP stakes strategy.
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Atalante SAS, which operates as Capza Expansion, is backing industrial company Novarc with the purchase of a minority stake in the business, joining existing investors Bpifrance, BNP Paribas Développement and Casra Capital. Amundi Private Equity Funds is selling its interest in Novarc as part of the transaction. Midmarket-focused Capza is backed by insurer AXA and invests in French companies.
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New York Life Insurance Co. is committing $50 million to support preservation of U.S. affordable housing rental properties through equity investments with Impact Community Capital. The commitment is part of a three-year, $1 billion impact investment initiative the insurer announced in April to help close the racial wealth gap by supporting smaller businesses, community development and affordable housing in underserved communities. So far, $200 million has been deployed as part of the initiative.
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EQT AB’s infrastructure strategy has closed its £3.3 billion, or about $4.53 billion, acquisition of some U.S. operations of FirstGroup PLC. The assets include school bus company First Student and First Transit.
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Lower midmarket-focused Allied Industrial Partners has purchased mobile power and services company CAT Entertainment Services through a carve-out from Caterpillar equipment dealer Ring Power Corp. Allied is rebranding the Memphis, Tenn.-based business as CES Power.
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The timberland investment group of Latin American investment bank BTG Pactual has purchased two private-equity timberland funds, including co-investment interests in both, from a Rayonier Inc. forest-products unit for about $35.9 million before closing costs. The funds own about 110,000 acres of woodlands in the U.S. Pacific Northwest region.
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KKR & Co. has invested in renewable energy development company Sol Systems LLC, taking a minority stake in the business, and committed as much as $1 billion to acquiring shovel-ready projects. The New York-based private-equity firm is investing in the Washington-based company through its Global Infrastructure Investors III fund
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BBH Capital Partners, the private-equity arm of private bank Brown Brothers Harriman & Co., is backing Gifted Healthcare, investing in the company alongside its founders, management and existing investors. The Metairie, La.-based company provides nurse staffing services mainly to hospitals and health systems.
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Bain Capital and Crosspoint Capital Partners have jointly acquired cybersecurity company ExtraHop Networks Inc. in a deal that values the business at about $900 million. The business uses artificial-intelligence technology to help clients detect and respond to cyber threats
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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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LongueVue Capital in New Orleans has sold Zavation Medical Products to Gemspring Capital Management in Westport, Conn. The Flowood, Miss.-based company designs and manufactures spinal implants and related devices. LongueVue acquired the business alongside Jeffrey Johnson, Zavation’s chief executive, in 2017 through its second and third buyout funds.
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Serruya Private Equity and Lion Capital have sold restaurant business Global Franchise Group LLC in Atlanta to FAT Brands Inc. for $442.5 million. The deal has expanded Fat Brands to more than 2,000 restaurants from about 700 previously and adds about $40 million to its adjusted pre-tax earnings, bringing the total to $55 million to $60 million while lifting its revenue to more than $100 million from $36 million.
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Oria Capital-backed Zenvia Inc.’s shares fell more than 21% in their trading debut Thursday after the communication-technology company’s initial public offering priced at the bottom end of the projected range, Robb M. Stewart reports for Dow Jones Newswires. Last week, the company scaled back the expected price range to $13 to $15 after planning in May to sell about 12.9 million shares at $15.50 to $17.50 each. The shares opened at $10.35 and fell to $10.20 at the close.
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Pantheon Ventures, a multi-strategy investment firm in London with about $65 billion in assets under management, has raised more than $500 million so far for its AMG Pantheon Fund through its U.S. private wealth division. The fund gives financial advisers and accredited investors access to the firm’s private-equity funds and has returned 12.81% annually since inception in 2015, according to a news release.
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Software-focused Five Elms Capital has collected $780 million for its Five Elms V growth equity investment fund. The additional capital brings the Kansas City, Mo.-based firm’s assets under management to more than $1.5 billion.
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Private-credit manager Pemberton Asset Management has added Sanford “Sandy” Ewing as a managing director for North America on the firm’s business development team in the U.S. He joined the firm earlier this month from Cross Ocean Partners, a special situations credit and aviation asset manager where he was co-head of marketing and investor relations.
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Genstar Capital has promoted Matt McCabe to principal. He first joined the firm in 2016 and rejoined in 2019.
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Technology specialist Vector Capital has promoted Sandy Gill to managing director and added Mac Hofeditz as a managing director and head of marketing and investor relations. Mr. Gill joined the firm in 2011. Vector also elevated Stephen Goodman, Amir Ravandoust, Gabriel Shields-Estrada and Tom Smith to principal.
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Former President Donald Trump’s Mar-a-Lago estate in Palm Beach, which has seen 22 homes sold for more than $40 million since the pandemic began.
PHOTO: SAUL MARTINEZ / BLOOMBERG NEWS
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Luxury home prices have been soaring in Palm Beach, Fla., as The Wall Street Journal’s Katherine Clarke and E.B. Solomont report. The priciest deal, at $122.7 million, delivered a contemporary oceanfront mansion to Scott Shleifer, a private-equity executive and a partner at Tiger Global Management, according to a person familiar with the deal.
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Singapore sovereign wealth investor GIC Pvt. Ltd. increased its investment in private equity during its fiscal 2021, which ended on March 31, with the proportion of its assets dedicated to the strategy rising to 15% from 13% in the previous year, Ben Otto reports for Dow Jones Newswires. GIC cited robust deal activity and strong asset performance for the increase. The 40-year-old manager has more than $453 billion in assets under management, ranking it as the world’s seventh-largest sovereign fund by assets, according to the Sovereign Wealth Fund Institute.
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EQT AB’s assets under management nearly doubled over the year through June, climbing 95% to €71.3 billion, equivalent to about $84.1 billion, Dominic Chopping reports for Dow Jones Newswires. The Stockholm-based multi-strategy investment firm said net profit rose more than sevenfold to €361 million.
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3i Group reported a 12.2% total return for the fiscal first-quarter ending June 30, aided by its 53% stake in European retailer Action, Steve Goldstein reports for Dow Jones Newswires. Action’s operating profit more than doubled as sales rose 31%.
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Private-equity firm Ancor Capital has settled a dispute with government regulators related to the business practices of one of its portfolio companies, Alliance Parent Inc., and paid $1.8 million to state and federal agencies without admitting liability. Ancor said the company denies any wrongdoing related to providing ambulatory electroencephalography services to patients in their homes, a practice that the company began before Ancor invested in the business in July 2017.
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