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Banner Ridge Tops Target | Lincolnshire Recap Dissected | Blue Owl Sees Path to Success
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Good day. Home prices jumped last month to record levels around the U.S. amid a shortage of properties for sale and would-be buyers armed with low-rate loans. Stepping into that picture is Blackstone with its latest multi-billion dollar housing purchase which no doubt will inflame critics who see private-equity investments in residential real estate as a reason why many Americans are unable to afford a home of their own. Never mind the difficulties many would-be buyers encounter in trying to save enough for a down payment, or the
blemishes in credit records that can bar access to low-rate loans. Blackstone and other investment firms see single-family rentals as an attractive business in the current market, as our Journal colleague Peter Grant reports.
In other private-equity news today, we have a story from our Preeti Singh on Banner Ridge Partners exceeding its $600 million target for its fourth secondary fund, citing people familiar with the matter. Meanwhile our Luis Garcia delves into the details of a dividend recapitalization by Lincolnshire Management, which made the rare move of publicizing the recent deal. Finally our Journal colleague Miriam Gottfried offers a look at how the newest listed private-equity firm, Blue Owl Capital Inc., chose to go public. We have these stories and many more for you below, so please wade in…
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Banner Ridge Partners is based in New York, seen above in April. PHOTO: ANGELA WEISS / AGENCE FRANCE-PRESSE / GETTY IMAGES
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Banner Ridge Partners has rounded up $800 million so far for its latest secondary fund, WSJ Pro Private Equity’s Preeti Singh reports. The New York firm's new fund, Banner Ridge Secondary IV, has surpassed its $600 million target, the latest sign of strong ongoing investor demand for secondary investment strategies.
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Many private-equity firms are taking advantage of low-cost credit to extract payouts from portfolio companies, with one firm even taking the rare step of publicizing such a transaction, Luis Garcia writes for WSJ Pro Private Equity. Lincolnshire Management recently announced a dividend recapitalization of Schumacher Electric Corp., a Fort Worth, Texas-based supplier of automotive battery chargers and other equipment that it acquired last year. The firm says the company can handle the $148 million in debt, which enabled Lincolnshire to take out all the capital it had invested in acquiring Schumacher and return it to investors in the fund that owns the company.
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The newest publicly traded private-equity firm, Blue Owl Capital Inc., had the benefit of observing how investors treated peers such as Blackstone Group Inc. and Apollo Global Management Inc. before it combined with a blank-check company to gain a listing on the New York Stock Exchange, Miriam Gottfried reports for The Wall Street Journal. Now the New York firm’s founders have set upon what they take to be a winning formula.
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$93.3 Billion
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The value of private equity investments held by the U.S. insurance industry last year, up 15% from 2019, according to insurance credit evaluator A.M. Best Rating Services Inc.
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In a previous housing market investment, Blackstone scooped up single-family homes after the subprime mortgage crisis and rented them out through a company called Invitation Homes. PHOTO: ANDY JACOBSOHN FOR THE WALL STREET JOURNAL
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Blackstone Group Inc. has agreed to buy a company that acquires and rents single-family homes in a $6 billion deal, a sign Wall Street believes the U.S. housing market will stay hot, Peter Grant reports for The Wall Street Journal. Blackstone has reached a deal to acquire Home Partners of America Inc., which owns more than 17,000 houses across the U.S. The company also offers its tenants the chance to eventually buy their homes.
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Technology investor Silver Lake is buying $1 billion worth of software supplier Splunk Inc.’s convertible senior notes, providing capital as the company transitions its products to a cloud-based platform and develops a subscription-revenue base. The notes have an initial conversion price of $160 per share of Splunk common stock and mature in July 2026. Splunk shares rose as much as 14% percent in Nasdaq trading Tuesday.
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CVC Capital Partners is acquiring a majority stake in medical administrative services provider ExamWorks LLC from Leonard Green & Partners and Singapore’s GIC. CVC is investing alongside company management. The Atlanta business provides services that include medical examinations, peer and bill reviews, Medicare compliance, record retrieval and document management.
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Insight Partners and General Atlantic led a $543 million growth investment in Israeli cybersecurity company Transmit Security Ltd. in a transaction that values the business at about $2.2 billion. The company is focused on developing biometric identification technologies to replace passwords as log-in credentials.
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Warburg Pincus has led a $255 million series C funding round in Insilico Medicine, which offers artificial intelligence driven drug discovery technology. Other new investors in the round include OrbiMed Advisors, Mirae Asset Capital, B Capital Group, Deerfield Management, Sequoia Capital China and Sage Partners.
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Permira led a $157 million investment in online software distribution website G2 Crowd Inc. in a transaction that values the Chicago company at about $1.1 billion, according to an emailed news release. Permira is investing through its growth strategy.
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KKR & Co. has agreed to acquire a majority stake in Education Perfect, an educational technology provider in Australia and New Zealand. Australian private-equity firm Five V Capital, which backed Education Perfect in 2017, is retaining a stake in the company alongside management. KKR is funding the deal out of its KKR Global Impact strategy, which seeks to back companies that contribute to the United Nations' sustainable development goals.
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Shares of SharpSpring Inc. rose almost 20% Tuesday after the cloud-based marketing-technology company agreed to be acquired in a $240 million deal, Colin Kellaher reports for Dow Jones Newswires. Constant Contact, an online marketing company backed by Clearlake Capital Group and Siris Capital, agreed to pay $17.10 a share for SharpSpring, a 21% premium to Monday's closing price of $14.11. The shares closed at $16.91 Tuesday.
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Blackstone Group Inc. is committing $250 million to a new biotechnology company to be established with Intellia Therapeutics Inc. and Cellex Cell Professionals GmbH. The Cambridge, Mass.-based venture will use genetic engineering techniques to develop new therapies targeting cancer and other diseases.
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Crosspoint Capital Partners is backing Irish computer vision software maker Everseen Ltd. The company’s artificial intelligence-enabled programs are used in retail self-checkout and inventory management systems.
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Infrastructure investor Actis has agreed to acquire two solar-energy installations in India with the capacity to generate as much as 500 megawatts of power from Fortum Corp. in Finland. Fortum said the “expected price” would be €280 million (or about $334 million) and that the transaction is expected to close next year. The deal includes the Pavagada II and the Rajasthan projects, which each have the capacity to generate 250MW of power.
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Bridgepoint Group has acquired a minority stake in Itsu, an Asian-themed fast-food chain in the U.K., Mark Latham reports for sister publication Private Equity News in London. The investment is expected to help finance the company’s expansion.
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Investment firm Peterson Partners is backing recycling company Crossroads Paper LLC, which plans to build a mill in Utah to serve the intermountain region, according to an emailed news release.
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Oakley Capital has agreed to acquire Portuguese software company Primavera Business Software Solutions and plans to combine it with its Ekon portfolio company in Spain, according to an emailed news release. The firm is investing through its Oakley Capital Private Equity III fund.
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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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Murat Atalay of Quanergy Systems describes autonomous vehicle technology at a Las Vegas event in January 2019. PHOTO: ROBERT LEVER / AGENCE FRANCE-PRESSE / GETTY IMAGES
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A blank-check company led by Citic Capital executives Fanglu Wang and Eric Chan has agreed to combine with and take public autonomous vehicle technology company Quanergy Systems Inc. in a deal that values the business at about $1.4 billion, Dave Sebastian reports for Dow Jones Newswires. The deal with Citic Capital Acquisition Corp. will help Sunnyvale, Calif.-based Quanergy pursue research and development, fund working capital, pay down all debt and propel potential future acquisitions, the companies said Tuesday. Backers of the company include Rising Tide Capital in San Francisco.
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A Mexican blank-check company led by two former Goldman Sachs Group Inc. Latin American executives, Martin Werner and Jorge Combe, has agreed to combine with betting and gambling operator Codere Online in a deal that gives the business an enterprise value of about $350 million, Matt Grossman reports for Dow Jones Newswires. The special purpose acquisition company, DD3 Acquisition Corp. II, has agreed to acquire a set of Codere entities: Codere Online Luxembourg S.A., Servicios de Juego Online SAU and Codere Newco SAU. Codere Online operates in Spain, Italy, Mexico, Colombia and Panama and plans to start operations in Buenos Aires this
year.
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Hillhouse Capital-backed medical-device maker Jenscare Scientific Co. has registered for an initial public offering of shares in Hong Kong, without specifying how many shares or at what price, Ben Otto reports for Dow Jones Newswires. The Ningbo, China-based company makes valves and valve-repair products to treat heart disease. An April investment round valued the company at about $1.36 billion.
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European private-equity firm FSN Capital has raised €1.8 billion (or about $2.15 billion) for its sixth fund focused on investing in middle-market companies. The firm said it has closed FSN Capital VI above its initial hard cap. The new fund is about 83% bigger than its predecessor, which raised roughly €985 million by the time it was closed in 2016.
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Golding Capital Partners has held an initial closing of €161 million (the equivalent of $192.2 million) for Golding Buyout Co-Investment 2020, the firm’s first buyout co-investment fund. The firm, which is targeting €200 million for the new fund, has already deployed about 40% of the capital into 10 investments, according to a press release.
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Redcar, a Santa Monica, Calif.-based private investment firm that targets commercial real estate in Los Angeles, is seeking $500 million for Redcar Fund II LP and a related parallel vehicle, according to a regulatory filing.
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Blackstone Group has hired Devin Glenn as a managing director and head of diversity equity and inclusion (DEI) at the firm. Ms. Glenn joins the global private investment firm from law firm Skadden, Arps, Slate, Meagher & Flom LLP, where she was the assistant director of DEI.
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The Raine Group, a banking and investment firm focused on telecommunications, media and technology, said it has added Michel Combes and Milo Medin to its newly established next-generation communications advisory board, as the firm extends its next-gen communications investment strategy to include privately held companies. Mr. Combes is currently president of SoftBank International and Mr. Medin is vice president, wireless services at Alphabet.
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Canadian private markets firm Northleaf Capital Partners said it is hiring Shane Feeney to lead the Toronto-based firm’s secondary investment strategy. Mr. Feeney joins the firm from Canadian pension manager Canada Pension Plan Investment Board, where he served as senior managing director & global head of private equity.
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One Rock Capital Partners has hired Jason Sutton as head of business development, based in New York, according to an emailed news release. He joins from Platinum Equity, where he worked in business development and evaluating acquisition opportunities.
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Water Street Healthcare Partners said it has promoted Mike Brennan to partner. Mr. Brennan has been with the firm for 12 years, joining in 2007 as an associate.
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Shares of U.K. engineering company Senior PLC fell 12% Tuesday after the company rejected the latest buyout proposal from Lone Star Funds, Ian Walker reports for Dow Jones Newswires. Senior said Lone Star "continues to fundamentally undervalue the company and its future prospects." Lone Star on Monday raised its prospective offer to 200 pence a share, valuing the company at about £838.8 million (equivalent to about $1.17 billion), from 185 pence. Lone Star said that was its final proposal.
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Bridge Investment Group Holdings Inc., a real estate investment firm with about $26 billion in assets under management at the end of March, has filed for an initial public offering, Josh Beckerman reports for Dow Jones Newswires. The Salt Lake City firm's investments include multi-family and senior housing, offices, logistics, debt strategies and agency mortgage-backed securities.
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EQT AB said that WorkWave, a provider of field management services software that was part of EQT portfolio company IFS, is separating from its former parent to become a standalone company. At the same time, the firm announced that WorkWave is completing two add-on deals with payment software provider Real Green Systems and customer service management software provider Slingshot. TA Associates, a minority investor in IFS, will continue to hold minority stakes in IFS and WorkWave. Serent Capital, RealGreen’s backer, will also become a minority shareholder in WorkWave.
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GCM Grosvenor Inc. detailed the regional and labor effects of its Labor Impact Fund last year in a report. The Chicago firm said four investments made by the infrastructure-focused fund generated about 2.9 million hours of work for union members through construction and roughly $2.2 billion in economic impact. The firm also said the activities spurred by the investments produced about $260 million of tax revenue.
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The government of Nigeria is considering setting up a private equity fund as part of its effort to boost the economy and fight poverty in Africa's most populous nation, Reuters reported. Nigeria’s economy has suffered from the drop in crude oil prices as the resource provides about 70% of government revenue. The proposed Nigeria Investment and Growth Fund would lead economic mobilization and also manage the nation’s natural resources, the presidency said.
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