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Siguler Guff Raises $1.9B for Small Buyouts | Apollo Unveils New Units | KKR's Equity Research Push

By Laura Kreutzer

 

Happy Friday Pro readers! As earnings season continues, much attention focuses on the largest private-equity firms and their performance. However, Maria Armental this morning has the scoop about one firm that favors the smaller end of the market. As Maria writes, Siguler Guff & Co. has raised nearly $2 billion to back small private-equity funds and co-investments directly in companies alongside them. The new fund is the firm’s largest yet for the strategy. Meanwhile, yesterday, on its quarterly earnings call, Apollo Global Management unveiled details about the launch of two newer investment strategies, one focused on the secondary market and the other on high-net-worth investor channels. As Ted Bunker and Luis Garcia report, each of the two new strategies received sizable checks from large overseas institutional investors. Additionally, The Wall Street Journal’s Corrie Driebusch has the scoop on a new partnership KKR & Co. is forming with Loop Up Capital as part of the former’s broader push into stock underwriting.

Finally, there’s still time to submit your Women to Watch nominations! Details and the link to the nomination page are included below. Have a great weekend!

 
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Today's Top Stories

New York-based Siguler Guff has raised at least four prior funds focused on small buyouts. PHOTO: MIKE SEGAR/REUTERS

For years, Siguler Guff & Co. has bet on investments in small and midsize companies and the private-equity managers that back them. This morning, WSJ Pro Private Equity’s Maria Armental reports that the New York-based firm has raised $1.97 billion for its largest fund yet for the strategy. Siguler Guff has already deployed some 11% of Siguler Guff Small Buyout Opportunities Fund V LP, which targets a mix of commitments to fund managers and co-investments.

Apollo Global Management Inc. is expanding into the secondaries market with the help of the Abu Dhabi Investment Authority and embarking on a strategy to draw in high-net-worth individual investors, Ted Bunker and Luis Garcia report, citing executives at the firm. The firm is launching its Sponsor and Secondary Solutions, or S3 business, with total commitments of about $4 billion, including an unspecified amount from the Mideast sovereign-wealth investor, Apollo executives said during an earnings call with analysts Thursday. At the same time, Apollo Chief Executive Marc Rowan said the firm’s new Apollo Aligned Alternatives business would be geared to high-net-worth individual investors with low fees and a simple cost structure. But he said the business has also attracted some $5 billion in total commitments from three institutional investors.

KKR & Co. is partnering with a Chicago-based investment firm to get access to equity research the private-equity firm hopes will help it win more stock-underwriting assignments, Corrie Driebusch writes for The Wall Street Journal. KKR has agreed to team up with Loop Capital Markets, whose equity-research team will be available to cover the buyout firm’s portfolio companies and other private clients going public, officials of the firms said.

 
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Women to Watch

Since 2015, WSJ Pro has published its annual "Women to Watch" list to highlight the accomplishments of outstanding women in the field. We're accepting nominations for senior deal professionals, rising star deal professionals, as well as limited partner or fundraising professionals through Aug. 8. For more information and to submit your nominations, simply click on this link.

 

Big Number

$53 Billion

The value of first-half secondaries transactions, up 11% from last year’s first half and a record for the period, according to data provider Evercore Inc.

 

Deals

Atlas Air operates a fleet of freight aircraft that helps Amazon.com move packages. PHOTO: NICOLAS ECONOMOU/NURPHOTO/ZUMA PRESS

A group led by Apollo Global Management Inc. has agreed to buy airfreight company Atlas Air Worldwide Holdings Inc.  in an all-cash deal that gives the company an enterprise value of about $5.2 billion, Will Feuer reports for The Wall Street Journal. The buyer group also includes J.F. Lehman & Co. and Hill City Capital. Purchase, N.Y.-based Atlas serves freight, commercial, charter and military customers.

Carlyle Group Inc.’s global credit platform is partnering with music industry veterans Hank Forsyth and Dan McCarroll to launch Litmus Music to acquire and manage music rights, Carlyle said in a press release. Carlyle Global Credit is committing $500 million of equity and debt, alongside capital from the new company’s management, to launch the business and fund transactions, the release stated.

Antarctica Capital has acquired geospatial intelligence company Descartes Labs Inc., according to a news release. The Santa Fe, N.M.-based company’s software-as-a-service is used for weather forecasting in agriculture, minerals exploration and commodity price projections.

Montagu Private Equity in London said it has agreed to acquire Maritime Intelligence, commonly known as Lloyd’s List Intelligence, from Informa PLC. The business provides maritime data and analytics used in shipping, finance and insurance, as well as legal and government operations.

Northstar Capital said it invested in ACI Asphalt & Concrete Inc. to help support private-equity firm Soundcore Capital Partners’ acquisition of the concrete asphalt repair and maintenance services provider, according to a press release.

Carlyle Group Inc. in Washington and Singapore sovereign funds investor GIC are backing Eneus Energy Ltd., a developer of “green ammonia” energy projects, according to a news release. The investment will support the company’s work on projects projected to have a total capacity of 14 gigawatts around the world.

Veritas Capital has acquired and combined revenue-cycle-management companies Coronis Health and MiraMed Global Services Inc., according to a news release. The merged business has more than 8,500 employees.

 

Add-On Deals

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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Exits

Clearlake Capital Group has sold software-as-a-service provider Brightly Software Inc. to Siemens AG for more than $1.87 billion, including over $1.57 billion up front in cash and 300 million in future payments that depend on performance, according to a news release. The Cary, N.C.-based company offers cloud-based applications for enterprise asset management and facility operations. Clearlake acquired the business, formerly known as Dude Solutions, in 2019.

 

Funds

Acon Investments said its single-asset continuation fund for baseball cap supplier New Era Cap LLC has collected about $700 million from investment firms including Apollo Global Management Inc., GCM Grosvenor Inc., Hamilton Lane Inc. and Neuberger Berman. The Washington-based firm said it has closed the fund, Acon Strategic Partners II LP. New Era has headwear partnerships with 170 organizations, including Major League Baseball, the National Football League and the National Basketball Association. Acon initially backed the company through its Acon Equity Partners IV fund in January 2021.

Denver-based Bow River Capital has closed its third fund, Bow River Private Equity Fund III LP, with $590 million, according to a press release. The fund exceeded a $500 million target and focuses on investments in U.S. midmarket companies across  industrial services, healthcare services and business services, the release stated.

Braemont Capital, a growth investment firm focused on technology, business services and financial services, has rounded up at least $474.9 million so far for Braemont Partners I LP and a related parallel fund, according to a regulatory filing. The Dallas-based firm was founded by Robert Covington, a former co-managing partner at Redbird Capital Partners, according to Braemont’s website.

 

People

TSG Consumer Partners has promoted Drew Weilbacher to managing director in addition to his role as chief compliance officer, based in the San Francisco area, according to a news release. He joined the firm last year.

AE Industrial Partners in Boca Raton, Fla., said it has promoted Nathan Dickstein to managing director and head of the AE Industrial Partners Aerospace Opportunities Fund. He joined the aerospace- and government-focused firm in 2020.

 

Industry News

Second-quarter mayhem on Wall Street reflected in posted results so far led Johnson Associates Inc. to project shrinking bonus pools for private-equity firms and other asset managers as well as investment banks. Johnson said the amount available for annual incentive payouts will shrink by as much as 20% for many asset managers this year, although hedge funds will see increases of the same magnitude. The bonus pools at investment banks are likely to shrink as much as 45% for underwriting and 25% for advisory activities, while bond trading could see a 20% increase and equity trading could rise by 10%, Johnson said. The New York advisory firm also said the slide in markets has cooled a “war for talent” on the Street.

Publicly traded StepStone Group reported a $21.5 million net loss for the quarter ending June 30, compared to a $126.5 million gain for the same period a year ago, according to the firm’s latest quarterly earnings report. However, StepStone saw its assets under management rise to $136.5 billion as of the end of June, a roughly 52% increase over the $89.8 billion the firm reported at the end of June 2021. StepStone's total commingled fundraising for the quarter ending June 30 was nearly $3 billion, the firm’s best quarter ever, Partner Michael McCabe said during the earnings call on Thursday.

Apollo Global Management said it is forming a joint venture with Korea-focused alternative asset manager Belstar Group to launch a private credit to large and midsize corporations and financial sponsors in Korea. The joint venture, which will be equally split between the two firms will offer asset-backed capital solutions, corporate lending and acquisition financing, according to a press release.

Sen. Kyrsten Sinema (D., Ariz.) is seeking to remove the carried-interest provision that would tighten tax rules regarding private-equity’s slice of investment profits from a measure headed to a Senate vote Saturday, Andrew Duehren reports for The Wall Street Journal, citing people familiar with the matter. Her stance has Democrats bracing for the possibility of last-minute changes to their climate-and-tax agreement, while hoping to avoid poison pills that could upset the delicate product of monthslong negotiations. Centrist Sen. Joe Manchin (D., W.Va.) and Senate Majority Leader Chuck Schumer (D., N.Y.) announced a deal last week to raise $739 billion in new revenue and spend $433 billion on climate, energy and healthcare programs over 10 years, reviving a moribund package and President Biden’s economic agenda along with it. Democrats need 100% of their party’s votes to ensure passage.

BlackRock, the world’s largest money manager, announced a partnership with Coinbase Global, Angel Au-Yeung reports for The Wall Street Journal. The deal will let BlackRock’s institutional clients manage their digital assets on Coinbase and conduct risk analysis on investment decisions using Aladdin, the asset manager’s suite of software tools. A BlackRock spokeswoman said the Coinbase agreement is part of the firm’s long-term cryptocurrency strategy.

Apollo Global Management Inc. Chief Executive Marc Rowan talked about the buyout firm’s efforts to return to normal working arrangements following the remote-work move by many Wall Street firms starting in 2020, making the remarks during an earnings call Thursday on how Apollo managed the return. “Culture for us is very important,” Mr. Rowan said, according to a transcript. “We are an in-office culture. We are back. Those who have visited us in person often remark they’re shocked at just how active and in-person our office is.” Mr. Rowan went on to point to what may have been a key motivator: “As I've said to some of our competitors, there's nothing like feeding people three meals a day to get them in the office.”

 
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About Us

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

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

Follow us on Twitter:@wsjpe, @LHVGarcia, @LauraKreutzer

 
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