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Overcoming Debut Fundraising Hurdles | QIC Focuses on U.S. Bets
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Good day and TGIF! Today our Maria Armental offers a look at how managers of newly established private-equity firms go about finding investors for their debut funds. Often their first steps include raising capital for individual deals.
Meanwhile our Luis Garcia reports on increasing interest in the U.S. renewable-energy infrastructure sector on the part of Australian private-equity firm QIC Ltd. Factors drawing the firm's interest include recently extended subsidies and rising risk levels in some other parts of the world.
We have these stories and many more condensed and linked for you below, so please read on...
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Money is harder to get for first-time funds. PHOTO: GETTY IMAGES / ISTOCKPHOTO
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Private-equity managers raising first-time funds face one of the toughest markets, making it all the more important to secure initial capital on a deal-by-deal basis to get fundraising off the ground, Maria Armental reports for WSJ Pro Private Equity, citing industry experts. The pace of inaugural fundraising has slowed to the lowest level in nearly a decade as investors rein in commitments and increasingly allocate a higher percentage of their capital to managers whose funds they have previously backed. Managers of new firms increasingly focus on raising capital on a deal-by-deal basis to create a track record and entice investors with preferential terms.
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Australian investment firm QIC Ltd. is increasingly turning to the U.S. to make infrastructure bets as the sector promises to benefit from federal support for clean-energy projects, WSJ Pro Private Equity’s Luis Garcia reports. The Brisbane-based firm, which managed $19.8 billion in infrastructure assets at the end of June, has invested more than $2 billion in the U.S. sector since early 2020. The American market also looks more attractive as risks mount in other parts of the world, QIC executives said.
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Join us on Monday for a members-only event to discuss how private-equity firms can foster female talent and how women can succeed in launching their own firms. Speakers include Leah Scanlan of Oak HC/FT, Amy Christensen of The Vistria Group, Michelle Dipp from Biospring Partners, Hollie Haynes from Luminate Capital Partners and JoAnn Price from Fairview Capital Partners. Sign up here.
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The number of active fund managers in the U.K., up from 355 in September 2018, according to Preqin Ltd. data
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A rendering illustrates the planned redevelopment of Hollywood's Television Center. IMAGE: BAIN CAPITAL
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Bain Capital is ratcheting up its investment in Hollywood, unveiling plans to spend $600 million with real estate developer Bardas Investment Group to redevelop the Television Center in the nation’s film capital. The Boston firm’s real estate arm and Bardas expect to set up a state-of-the-art production studio on the 6.4-acre site and plan to rebrand the former home of Technicolor’s headquarters as the Echelon Television Center, according to a news release. Firms including Apollo Global Management Inc., Blackstone Inc. and Silver Lake in recent years have joined the move to invest in production companies or soundstages where content is produced. Bain Capital partnered with West Hollywood-based realty investor Bardas in 2019 to focus on the region’s entertainment sector and last year they committed to invest $450 million to redevelop Echelon Studios, located near Television Center.
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Apollo Global Management Inc.’s Brightspeed business is dropping a planned debt syndication to finance the planned acquisition of local exchange businesses of Lumen Technologies Inc. in 20 midwestern and southeastern states as well as Texas, Pennsylvania and New Jersey. When announced in August 2021, the transaction was valued at about $7.5 billion, subject to adjustments. The acquisitions would be rolled into Charlotte, N.C.-based Brightspeed, whose legal name is Connect Holding LLC.
Brightspeed said last year it intended to invest around $2 billion to improve broadband services over the acquired systems. Brightspeed said the deal is still expected to close early next month with financing from Apollo and commitments obtained last year. The transaction is expected to transfer about $2.5 billion of pension assets and obligations to the buyer.
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GEM Global Yield LLC in Luxembourg said it is investing as much as $310 million in streaming app provider Triller Inc. through a share subscription that has a 36-month term following a public listing of the Los Angeles-based company’s common stock. Triller has privately registered for an initial public offering.
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Hitachi Transport System Ltd. said KKR & Co. has delayed the start of a planned 8,913 yen per share tender offer that values the business at about $4.65 billion, Reuters reported, citing a statement from the company. Instead of starting it today, the Hitachi Ltd. unit said it now expects the offer period to begin in mid-November.
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Healthcare-focused Great Point Partners has made a growth investment in pharmaceutical services and supply company iXCells Biotechnologies USA LLC, according to a news release. The San Diego-based company provides materials and services used to develop new drugs.
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Thoma Bravo is backing financial services automation company SMA Technologies Inc. with a growth investment, according to a news release. ParkerGale Capital, which has been the company’s majority owner, will retain a minority stake after the transaction. ParkerGale first invested in the Houston-based company in 2020.
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Brand Velocity Group said it has acquired team apparel and equipment maker American Soccer Co., which operates as Score Sports. The Wilmington, Calif.-based company equips youth athletics teams, including uniforms across a variety of sports.
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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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Fort Point Capital in Boston said it has closed on $340 million for its FPC Small Cap Fund III LP, after reaching the fund’s upper limit. The firm had targeted $250 million for the pool and began fundraising in March.
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The startup incubator at the Stockholm School of Economics, where the payments and lending company Klarna Holding AB was nurtured, said it is closing on 40 million Swedish kronor, equivalent to about $3.6 million, for a new investment fund backed by Bonnier Ventures and several local investors to make long-term bets on new businesses. Bonnier is the new fund’s biggest investor and will have a representative on its investment committee.
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Morgan Stanley has promoted Massimiliano Ruggieri, the head of its Europe, Mideast and Africa private-equity coverage, to lead its investment bank in the region, following a reshuffle of its top ranks in July, Paul Clarke reports for sister publication Financial News in London, citing people with knowledge of the move. Mr. Ruggieri, who took on the new role last week, had led regional private-equity coverage for the bank since 2018.
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Decarbonization-focused Ara Partners said it has hired Ari David and Manasi Desai as vice presidents on its investments team, based respectively in Boston and New York. Mr. David joins from AUA Private Equity, where he held a similar position, while Ms. Desai comes aboard from KKR & Co., where she was a principal.
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Private equity firms in Britain have been racing to shore up their portfolios and re-think future deals during a frenzied week of currency crisis and market volatility, Sebastian McCarthy reports for sister publication Private Equity News in London. Sterling hit a record low against the U.S. dollar earlier this week, with investor jitters spreading through U.K. financial markets in the wake of policy moves that sent interest rates soaring, prompting Bank of England intervention.
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JPMorgan Chase & Co. cut bonuses for its entry-level bankers in London by 52% this year, the biggest reduction of any major investment bank, after 2021 saw multiple salary hikes for juniors, Paul Clarke reports for sister publication Financial News in London. The U.S. investment bank paid average bonuses for first-year analysts in the U.K. £21,000, equivalent to about $23,358, according to a survey of junior deal makers by specialist recruiters Dartmouth Partners. This amounted to an average of 32% of base salaries — again, the lowest among its peers — as banks cut back on junior bonuses amid a slump in deals.
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Private funds managers in the U.K. engaged in more than $60 billion worth of deals by the end of last month, well off last year’s pace, Preqin Ltd. said. Transactions last year totaled $125 billion, an annual record for the country’s private equity industry. The previous record of $73 billion was established in 2019, before the coronavirus pandemic.
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Rising interest rates are boosting corporate pension plans, providing finance chiefs with an option to lighten their companies' balance sheets and transfer obligations to insurers, Jennifer Williams-Alvarez reports for CFO Journal. The U.S. central bank has raised interest rates five times this year as it battles persistently high inflation, including last week when it opted for the third consecutive 0.75-percentage-point interest-rate increase and indicated further rate action.
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Real-estate focused private assets manager CaliberCos Inc. has filed plans to go public, saying it expects to sell 1.6 million shares priced from $5 to $6 each, Stephen Nakrosis reports for Dow Jones Newswires, citing regulatory filings. Scottsdale, Ariz.-based Caliber said it markets fund investments directly to individuals as well as through investment advisers, and that it also approaches family offices and institutions.
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