Welcome back. Private equity has had a rough start of the year, but it’s been a tale of two markets. In North America, investments declined 12% through March 23 from the prior-year period, while exit value was halved, according to Mergermarket. The data provider flagged some 1,627 asset sale processes in North America reported to be underway that have not resulted in an announcement or update. In Europe, the Middle East and Africa, however, sponsor investment rose 35% and exits rose 12% from the prior year period, putting them on part with record year-to-date levels of 2021, Mergermarket said.

Meanwhile, in this morning's newsletter, Luis Garcia spoke with Energy Capital Partners, which is hunting for gas-fired power plant deals after selling Calpine but moving cautiously as prices rise. 

And Lauren Thomas reports that KKR stands to make 15-times its investment with the sale of data-center cooling business CoolIT, which would make it one of KKR's most successful bets. But CoolIT’s roughly 640 employees are also reaping the rewards with an average expected payout of $240,000 each.

We have these stories and more. Read on…

Energy Capital Partners is looking to make new investments in natural-gas-fired electricity plants but is moving cautiously as asset prices rise in a booming U.S. power sector considered somewhat insulated from war in the Persian Gulf region, WSJ Pro's Luis Garcia writes. Summit, N.J.-based ECP invests in both gas-fired and renewable power plants, as well as businesses that help make energy infrastructure more sustainable. The firm, owned by London-listed Bridgepoint Group, a private-market investor that manages assets of about $98 billion, sold gas-plant operator Calpine this year for $26.6 billion.

Buyout firm KKR & Co. expects to notch a 15-fold gain on its equity investment in data-center cooling business CoolIT through a $4.75 billion sale announced last week, Lauren Thomas reports for the Journal. The firm acquired a majority interest in the business in 2023 at a $270 million valuation. The company's roughly 640 workers are expected to gain as well, reaping an average of around $240,000 each through the firm's employee ownership program.

As more women have risen through the ranks, they shape not only the cultures of their own firms but also the industry itself. Join us for a conversation with some of our past and present Women to Watch honorees, as we discuss issues female professionals face building their careers, as well as some of the emerging themes that stand to shape dealmaking as the year unfolds. Register here to join the webinar at 1 p.m. ET March 26.

Brookfield Asset Management and Canadian pension manager Caisse de dépôt et placement du Québec, or La Caisse, have agreed to acquire publicly traded Canadian renewable energy company Borelex in a transaction with an implied enterprise value of 9 billion Canadian dollars, or around $6.5 billion, Robb M. Stewart reports for the Journal. La Caisse, Boralex’s largest shareholder with about 15%, is expected to increase its stake to 30% through the deal, which has an equity value of about C$3.8 billion. Brookfield is investing through its infrastructure strategy.

BlackRock's Global Infrastructure Partners is leading fresh financing of $250 million for Partners Group-backed energy company Budderfly, joined by Vantage Infrastructure. The Shelton, Conn.-based company works with customers to reduce their energy consumption as well as emissions.

Sequoia Capital and Singapore's GIC led a $200 million growth investment in Harvey AI, which develops software for legal work using artificial intelligence technology. The deal, joined by Coatue Management and others, valued the San Francisco-based company at $11 billion.

Australia's Macquarie Asset Management has emerged as the lead contender to acquire Malaysian telecom giant Axiata Group's majority stake in one of the world's biggest telecommunications tower firms, P.R. Venkat reports for the Journal, citing people familiar with the matter. Talks to acquire Edotco at a valuation of $3.5 billion to $4 billion continue, the people said, and a deal isn't assured. A representative of Macquarie Group declined to comment. One person said recent developments in the Middle East have been considered but aren't expected to affect any potential deal.

Canyon Partners led the arrangement of $4.8 billion in financing for the combination of Thoma Bravo-backed shipping and logistics company Auctane with freight broker WWEX Group.

KKR & Co. has struck a deal to acquire bakery chain Nothing Bundt Cakes from Roark Capital for over $2 billion, including debt, Lauren Thomas reports for the Journal, citing people familiar with the matter. The franchising company has hundreds of U.S. locations that offer customizable Bundt cakes in a range of sizes and flavors. Roark acquired the Dallas-based chain in 2021.

Insight Partners led a $60 million growth investment in Rocketlane, an AI-powered developer of professional services automation applications. The San Francisco-based company has more than 750 customers and more than doubled its revenue over the past year.

Malaysian federal pension system Kumpulan Wang Persaraan is joining Stonepeak in a joint venture with KJTS Group Berhad, Lestari Cooling Energy, to develop district climate-control systems in Malaysia. KWAP, as the pension is also known, is committing up to 190 million ringgit, or roughly $48 million, to the venture.

StepStone Group led a $42 million growth investment in machine-intelligence developer Sift Stack as the company adds to its engineering team to build machine interfaces for artificial-intelligence applications in manufacturing, space and defense technology. StepStone has invested in Marina Del Rey, Calif.-based Sift since at least July, firm documents show.

Quadrille Capital led a $40 million growth investment in software company Adonis, joined by existing backers including General Catalyst. The New York-based company develops artificial intelligence applications used in medical billing and revenue management.

Clearlake Capital Group in Santa Monica, Calif., is buying power grid infrastructure modernization company Qualus from New Mountain Capital. Qualus works with utilities and their suppliers to provide design and engineering as well as other services. New Mountain acquired Qualus in 2021.

TowerBrook Capital Partners has acquired French sports equipment personalization services provider ID Unlimited from family-backed investment holding company Dentressangle. The Lyon, France-based company generates some €120 million, or $138.8 million, in revenue and provides jersey customization and branding for many of Europe’s largest soccer teams.

Chimney Rock Equity Partners in Austin, Texas, has acquired manufacturer United Electronics from Albion River Management in Rockville, Md. The Charleston, S.C., company designs and produces radio-frequency components such as circuit boards for use in defense, aerospace and other industries.

Bow River Capital in Denver is acquiring venture investor Spur Capital Partners, which has about $1 billion in regulatory assets under management. Oklahoma-based Spur primarily manages funds-of-funds investments but Bow River intends to set up an evergreen fund to invest in startups.

Bain Capital in Boston began the process of accumulating enough shares in Indian gold lender Manappuram Finance to hold a co-controlling stake, making a public tender offer Wednesday, according to the Economic Times and other local news outlets. The firm aims to acquire enough shares through open-market purchases to hold a roughly 42% stake in the Mumbai-listed non-bank lender. Manappuram serves more than 6.5 million customers and has around 51,000 employees, according to Bain Capital.

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

Arcline Investment Management-backed aerospace components maker Arxis registered for an initial public offering, without saying how many shares it plans to sell or what the expected price range would be. Nashville, Tenn.-based Arcline has backed the Bloomfield, Conn.-based specialized manufacturer since 2019, according to the firm's website.

Viking Growth has sold its stake in European workforce management software provider Tamigo to U.S.-based Accel-KKR. Viking initially backed the Copenhagen-based company in 2019.

Cinven has sold a minority stake in its pest control chemicals manufacturer Envu to GIC in Singapore, Sebastian McCarthy reports for sister publication Private Equity News in London. Cinven acquired the former Bayer environmental science unit in 2022.

A bid to buy Pepper Money, a Sydney-listed non-bank lender backed by KKR & Co., has been rejected by the company. The bidder, wealth adviser Challenger, had trimmed its offer about 13% to 1.01 billion Australian dollars, or about $769.6 million, at A$2.25 a sharem citing deteriorating market conditions, according to a securities filing. KKR took Pepper Money private in 2017, relisted it in 2021 and remains its majority owner. 

Carlyle AlpInvest and Hamilton Lane are among the investors that have backed a continuation fund that will recapitalize TowerBrook Capital Partners’ investment in Eisner Advisory Group. TowerBrook initially backed Eisner Amper in 2021 in one of the first private-equity investments in a large U.S. accounting and advisory firm. The private-equity firm funded the initial deal out of its TowerBrook Fund V, which closed in 2018 with $4.25 billion.

Pictet Group in Geneva said its Pictet Alternative Advisors unit has closed on €403 million, or about $467.8 million, for its first direct private equity strategy. The firm invests from Pictet Private Equity Entrepreneur Capital I in lower midmarket family or founder-owned businesses in the DACH region of Germany, Austria and Switzerland as well as in the U.K.

Eurazeo in Paris has appointed Siu-Wai Ng as a partner, head of product with its investor relations team, based in London. She was most recently with Civitas Investment Management.

Two Rhode Island safety net hospitals that had been owned by bankrupt Prospect Medical Holdings, which was backed by Leonard Green & Partners, have been refinanced and transferred to a local nonprofit group. Centurion Foundation helped shepherd the four-year process, which involved over $100 million in privately placed bonds and an $18 million contribution from state coffers, prevented the closure of Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence, according to the nonprofit Centurion. A new nonprofit, CharterCARE Health of Rhode Island, now controls both institutions.

Publicly traded business development company FS KKR Capital had its credit rating downgraded to sub-investment grade by Moody's, cutting it to Ba1 from Baa3, the lowest investment grade used by the risk evaluator. Moody's cited "asset quality challenges" that persist at the BDC, which is jointly managed by KKR & Co. and Future Standard, formerly FS Investment Solutions, in Philadelphia. Moody's noted the BDC's non-accrual loans rose to 5.5% of its investments at the end of December from 5% three months earlier, as well as large investment write-downs. Philadelphia-based FS KKR Capital last month reported a nearly 12% drop in net assets to about $5.85 billion at the end of last year from a year earlier.

An obscure bank capital rule has helped enable the growth of nonbank lending like private credit. It could be about to get even more enabling, Telis Demos writes for the Journal's Heard on the Street column. Proposed changes in capital reserve requirements for banks could give them more incentives to lend to their nonbank rivals.

Market index provider MSCI has constructed private-equity and credit gauges based on daily marks of estimated net asset values, using quarterly reports and proprietary econometrics models. The benchmark provider said the indexes effectively remove pricing lags typically seen in both asset classes.

High-risk credit asset values are expected to decline as investors price in private credit risk, ING analysts say in a research note, Miriam Mukuru reports for Dow Jones Newswires. Liquidity challenges in the private-credit sphere are less likely to spread to the wider financial system but could affect lower-rated credit, the analysts say.

Larry Fink, BlackRock's chairman and chief executive, offered a simple message to private-credit investors who want to exit their funds prematurely: "Live with it,” Steve Goldstein reports for sister publication MarketWatch. BlackRock recently limited withdrawals from its $26 billion HPS Corporate Lending Fund to 5% after receiving requests amounting to 9.3% of the fund in the fourth quarter. “If I allowed more people to redeem, I’m not a fiduciary to those who are staying in because the contract states on the front page, you know, we will allow up to 5% redemption every quarter,” Fink said in an interview with the British Broadcasting Corp.

Jefferies Financial Group reported $17 million in losses tied to two companies whose failures sparked widespread concern about private credit, Katherine Hamilton reports for Dow Jones Newswires. Jefferies recorded $17 million in losses related to Market Financial Solutions, a U.K. property lender, and automotive parts supplier First Brands in the U.S. after adjusting for compensation and taxes. Its risk of further losses tied to First Brands is now zero.

Buyout firm KKR & Co. is the latest Wall Street powerhouse to open a Miami outpost, saying the move would expand its presence in a Latin America-focused hub.

The number of Americans worth tens of millions and hundreds of millions of dollars has boomed in the past few decades, thanks to a rising stock market, lucrative private investments and swelling valuations for small and midsize businesses, Rachel Louise Ensign reports for the Journal. While some of these people made their money in technology or finance and live on the coasts, many others live outside of the highest-cost areas and own small businesses like car dealerships. There are about 430,000 U.S. households worth $30 million or more, according to an analysis of Federal Reserve data by Owen Zidar, a Princeton economics professor who studies wealth.

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

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