Morning! Before you flee the city for a well-earned break, we have a private-credit double for you to enjoy.

Demand for alternative lending strategies remains strong but venture-debt is a striking exception, reports Isaac Taylor. Fundraising for funds that lend to startups slumped 63% last year.

Telis Demos of the Journal writes about how private credit firms are dealing with a dramatic slowdown in the market that fuelled their tremendous growth, private-equity buyouts. Now, private credit has a problem: too much money.

Now onto the news ...

Please note: The WSJ Pro Private Equity newsletter won't be published Monday, May 26 in observance of Memorial Day. We will be back on Tuesday.

Fundraising for venture-debt strategies fell sharply last year despite an overall increase in demand for loans from private-credit funds, Isaac Taylor reports for WSJ Pro. Capital raised to provide loans to venture-backed startups fell about 63% to $1.3 billion last year, from $3.5 billion the year before, according to research provider PitchBook Data. The decline mirrors the struggles faced by many younger technology companies, whose valuations took a hit in line with a sharp increase in the cost of the capital needed to fund their growth.

Managers of private-lending funds have no shortage of money at their disposal. The question is whether they will have enough good places to put it, Telis Demos writes for the Journal’s Heard on the Street. During other recent bouts of volatility and uncertainty, managers of direct-lending funds—who raise money from investors to lend to relatively risky, privately held companies—have seen surges of activity and returns. But things are different now, as more firms have entered the market and existing players have raked in massive amounts of capital, even as a traditional source of demand–the buyouts industry–has slowed sharply.

WSJ Pro Private Equity is embarking on its latest Survey of Secondary Market Buyers, which we use as the basis for compiling our annual special report on the latest trends shaping the secondary market. Secondary buyers can complete the survey by June 20, 2025 through the following link.

A more humanlike generation of customer-service voice bots is here, spurred by advances in artificial intelligence and a flood of cash.

PepsiCo is pushing back its climate goals. Its sustainability chief says the world “was a very different place” when it set its targets.

An AI-generated PR pitch succeeded in generating attention—and hostility.

Former audit regulators, academics and investors are preparing to fight the proposed elimination of an accounting oversight board created after Enron.

Gemspring Capital in Westport, Conn., is acquiring the polymer chemicals business of Goodyear Tire & Rubber, including operating plants in Houston and Beaumont, Texas, as well as a research facility in Akron, Ohio, Connor Hart reports for WSJ Pro. Goodyear said it expects the purchase price to be about $650 million in cash.

Ardian in Paris is acquiring a majority interest in electrical equipment manufacturer and maintenance services provider MasterGrid, with company founders and employees also revinvesting alongside the firm. The Grenoble, France-based company was carved out of Siemens by Andera Partners in 2019 and focused on making and maintaining Merlin Gerin equipment, mainly working with utilities and industrial customers. Andera’s Sylvain Charignon said the firm is “proud to hand over the reins” to Ardian.

Intermediate Capital Group is providing fresh capital to Hakim Group, a collection of independent U.K. opticians and audiologists, while existing backer All Seas Capital has realized its previous investment and reinvested alongside ICG, as the London-listed firm is also known. Hakim has assembled more than 500 optometry practices across the U.K. and Ireland and supports them with back-office functions as well as hiring and training. All Seas first backed the business in 2020, according to the firm’s website.

The growth equity arm of H.I.G. Capital has invested in AgileBlue, a producer of AI-powered software that automatically detects and responds to cyber attacks. H.I.G. Growth has backed several cybersecurity businesses, including Corelight, JumpCloud, Trace3, HelpSystems, ECI and Lancope.

Main Street Capital has backed a $42.5 million debt and equity financing to support the recapitalization of Doral, a Milwaukee-based provider of contracting services to customers across markets that include customers in supply chain & logistics, construction, food & beverage and wastewater.

EQT AB has agreed to acquire wastewater infrastructure company Seven Seas Water Group from Morgan Stanley Infrastructure Partners. EQT is backing the deal out of EQT Infrastructure VI, which closed earlier this year with €21.5 billion, or around $24.2 billion. Based in Tampa, Fla., and Houston, Seven Seas manages more than 220 water and wastewater treatment plants across the U.S., the Caribbean and Latin America.

StepStone Group participated in a $50 million growth investment in artificial intelligence-powered software maker Siro Technologies, joining deal leader SignalFire and 01 Advisors as well as existing backers of the company. New York-based Siro’s software is designed to assist sales workers in the field and on the showroom floor by recording and analyzing conversations with prospects that can be used for coaching and guiding behavior.

Our add-on deal interactive tool allows you to sort and analyze volumes of add-on deal data compiled by WSJ Pro. View more.

Jefferson Capital, a J.C. Flowers-backed consumer debt collection business, has registered for an initial public offering of shares, without stating how many it plans to sell or at what price. The Minneapolis-based company buys and manages charged-off and insolvency consumer accounts. J.C. Flowers acquired the business from Flexpoint Ford in 2018.

Insight Partners-backed physical therapy facilitator Hinge Health saw its shares jump over 17% to close at $37.56 following the company’s initial public offering Thursday. The IPO priced the shares at $32 each. Insight held roughly 17% of the San Francisco company’s shares, giving it almost 20% of the voting power before the IPO and planned to sell 1.25 million Class A shares in the offering to leave it with around 11 million Class B shares. Other firms with significant stakes included Coatue Management and Tiger Global Management.

Lower midmarket-focused Sterling Investment Partners in Greenwich, Conn., aims to raise $1.25 billion for its fifth buyout fund, Sterling Investment Partners V, and a related vehicle, a securities filing indicates. Sterling invests in companies with $50 million to $500 million in revenue and adjusted pretax earnings of $15 million to $50 million, according to a separate regulatory filing. The firm managed over $1.85 billion at the end of last year.

Arena Investors in Purchase, N.Y., has closed on about $1.09 billion for Arena Special Opportunities Partners Fund III and related vehicles, including co-investment funds and programmatic capital. The firm is focused on private-credit strategies. The firm’s predecessor fund closed on $930 million including co-investments and programmatic capital in 2022.

Investcorp Corsair Infrastructure Partners in New York has named Stephen Benjamin as operating partner for local communities, focusing on assembling public-private partnerships for transportation and logistics projects. He previously served as a White House aide in the Biden administration and was the mayor of Columbia, S.C., for almost 12 years.

Great Hill Partners in Boston has elevated Mike Thompson to managing director, head of growth team. He joined the firm in 2018.

Builder.ai, a software business that has been backed by sovereign wealth investor Qatar Investment Authority, Iconiq Capital and Insight Partners, among others, entered insolvency earlier this week in London. The U.K. company legally named Engineer.ai Global was valued at more than $1 billion in a growth investment round of  more than $250 million led by the Qatar sovereign wealth fund in 2023, according to research provider PitchBook Data.

StepStone Group in New York ended its fiscal 2025 with assets of about $189.4 billion, up around 21% compared with the end of March last year, while assets under advisement were little changed at about $519.7 billion compared with $521.1 billion a year earlier. The firm’s fee-related earnings surged 85% to a best-ever $94.1 million for its fiscal fourth quarter from $50.9 million in the same period a year ago. While fourth-quarter revenue rose 6% to about $377.7 million, StepStone’s net income dropped 84% to just under $13.2 million, producing a net loss of 24 cents a share.

Large institutional investors such as BlackRock who own shares in rival companies risk violating antitrust laws if they use their influence to affect how those businesses compete, U.S. antitrust enforcers argued Thursday for the first time, Dave Michaels reports for the Journal. The Justice Department and Federal Trade Commission made those views public by submitting a brief in a case filed last year by Texas Attorney General Ken Paxton and other Republicans against BlackRock, State Street and Vanguard Group. The federal government’s filing, known as a statement of interest, says the asset managers’ holdings of multiple companies in the coal industry—known as common ownership—could violate competition laws.

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