A Fond Farewell and Look Back at Eight Years

[wsj-responsive-image P="//si.wsj.net/public/resources/images/BN-NS209_PM_Bea_P_20160425135139.jpg" J="//si.wsj.net/public/resources/images/BN-NS209_PM_Bea_J_20160425135139.jpg" M="//si.wsj.net/public/resources/images/BN-NS209_PM_Bea_M_20160425135139.jpg" caption="" credit="iStockphoto.com/Dennis Oblander" placement="Inline" suppressEnlarge="false" ] By the Private Equity Beat staff We’re moving to a spiffy homepage at WSJ Pro Private Equity. Parting ways with our readers after nearly eight years—not even as long as some private equity hold periods—would be tragic, so we hope you will join us on our new adventure. This blog, launched in January 2009, isn’t nearly as old as the typical end-of-life private equity fund. But in less than a decade, it’s followed private equity firms as they have gone public, former presidential hopeful Mitt Romney’s return to private equity, and pension funds’ fight (and failed bids) for more transparency from general partners. As an experiment, we went cold turkey off of private equity-backed products for a week, highlighting the industry’s sway over the myriad of companies Continue reading "A Fond Farewell and Look Back at Eight Years"

In China, Firms Face Competition as Tech Businesses Target Health Care

Health care-focused, private-equity investors in China are facing competition and forging partnerships as Chinese technology companies seek to leverage their dominance on all things digital in the provision of care. But consultant Bain & Co. said private-equity investors looking for opportunities in the emerging market’s health-care sector aren’t squeezed out. “The Internet health-care sector is still small,” said Vikram Kapur, a Bain & Co. partner based in Hong Kong. “The bulk of investments in health care in China is still in biopharma and service providers like hospitals, and that’s where a lot of foreign investors bring in not just capital, but also access to expertise and relationship[s]. That helps to take some of the local services to the next level.” Three prominent Chinese technology companies have each made health-care investments in recent years, sometimes in collaboration with private equity. Tencent Holdings led a $100 million investment round for mobile Continue reading "In China, Firms Face Competition as Tech Businesses Target Health Care"

The Morning Leverage: Brazos Sheds Apparel Brand Southern Tide

[wsj-responsive-image P="//si.wsj.net/public/resources/images/BN-NH707_ML_mai_P_20160329142525.jpg" J="//si.wsj.net/public/resources/images/BN-NH707_ML_mai_J_20160329142525.jpg" M="//si.wsj.net/public/resources/images/BN-NH707_ML_mai_M_20160329142525.jpg" caption="" credit="Mike Lucas for Dow Jones" placement="Inline" suppressEnlarge="false" ] From this morning’s LBO Wire: Brazos Private Equity Partners LLC sold apparel brand Southern Tide LLC to clothing maker Oxford Industries, Laura Cooper reports. A filing with the Securities and Exchange Commission states Oxford acquired the company for $85 million. Southern Tide, of Greenville, S.C., sells its Southern style apparel through its website and at Nordstrom, Von Maur and more than 850 retailers in more than 45 states as well as Washington, D.C., the Virgin Islands and Bermuda. More stories available to LBO Wire subscribers: Webster Capital has hired investment bank Goldman Sachs Group Inc. to explore a sale of Epic Health Services Inc., a pediatric-focused home-health-care company, writes Amy Or…Trivest Partners is rounding up commitments for a new growth equity fund Continue reading "The Morning Leverage: Brazos Sheds Apparel Brand Southern Tide"

The Morning Leverage: Battery to Buy Check Image Software Company

[wsj-responsive-image P="//si.wsj.net/public/resources/images/BN-NH707_ML_mai_P_20160329142525.jpg" J="//si.wsj.net/public/resources/images/BN-NH707_ML_mai_J_20160329142525.jpg" M="//si.wsj.net/public/resources/images/BN-NH707_ML_mai_M_20160329142525.jpg" caption="" credit="Mike Lucas for Dow Jones" placement="Inline" suppressEnlarge="false" ] From this morning’s LBO Wire: Battery Ventures said agreed to acquire Goldleaf Enterprise Payments Inc., a payment software provider, publicly-traded financial technology company Jack Henry & Associates, Laura Cooper reports. Goldleaf, which will change its name to Alogent, offers software that focuses on electronically capturing, processing and analyzing check data and images. Battery General Partner Russell Fleischer said his firm believes the company will be a platform to make acquisitions in the branch-deposit capture and broader banking services sectors, among others. More stories available to LBO Wire subscribers: BBH Capital closed its fifth fund with $802 million…Private equity health-care deal value dropped in 2015 although distressed opportunities may pick up this year…And Private equity–backed oil and gas deals fell during the first quarter. (LBO Wire is Continue reading "The Morning Leverage: Battery to Buy Check Image Software Company"

The Morning Leverage: EIG Global Energy Caught by Breitburn’s Liquidity Woes

[wsj-responsive-image P="//si.wsj.net/public/resources/images/BN-NH707_ML_mai_P_20160329142525.jpg" J="//si.wsj.net/public/resources/images/BN-NH707_ML_mai_J_20160329142525.jpg" M="//si.wsj.net/public/resources/images/BN-NH707_ML_mai_M_20160329142525.jpg" caption="" credit="Mike Lucas for Dow Jones" placement="Inline" suppressEnlarge="false" ] From this morning’s LBO Wire: EIG Global Energy Partners is starting to feel the pinch from the liquidity issues faced by oil and gas company Breitburn Energy Partners, reports Shasha Dai. EIG and co-investors pledged up to $1 billion in preferred stock and debt to the company in March 2015. Breitburn said it is suspending dividend payments on preferred stock and skipping interest payments on certain bonds. The company has 30 days to pay up or it will trigger a default. However, Ms. Dai notes that EIG could have some downside protection should Breitburn enter into a restructuring. More stories available to LBO Wire subscribers: Kohlberg & Co. agreed to buy American Capital-backed behavioral health care provider The Meadows of Wickenburg LP…North Castle Partners collected at least Continue reading "The Morning Leverage: EIG Global Energy Caught by Breitburn’s Liquidity Woes"

The Morning Leverage: Brookfield Raises at Least $3.38B for Restructuring Fund

[wsj-responsive-image P="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_P_20160329142525.jpg" J="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_J_20160329142525.jpg" M="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_M_20160329142525.jpg" caption="" credit="Mike Lucas for Dow Jones" placement="Inline" suppressEnlarge="true" ] From this morning’s LBO Wire: Brookfield Capital Partners raised at least $3.38 billion so far for its fourth fund to buy distressed companies, writes Chris Cumming. The firm, the private equity arm of Toronto-based Brookfield Asset Management, didn’t list a target for Brookfield Capital Partners IV LP in a filing with the Securities and Exchange Commission. However, a New Jersey state pension document last year said the firm is seeking $3.5 billion. Brookfield Capital funds invest in distressed or underperforming companies in Canada and the U.S. More stories available to LBO Wire subscribers: SV Life Sciences Advisers and Health Enterprise Partners formed Jet Health Inc. as the two firms seek to tap into growing demand among patients for medical treatment at home, Amy Or Continue reading "The Morning Leverage: Brookfield Raises at Least $3.38B for Restructuring Fund"

The Morning Leverage: Aquiline, Genstar Sell AssetMark to China’s Huatai Securities

[wsj-responsive-image P="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_P_20160329142525.jpg" J="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_J_20160329142525.jpg" M="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_M_20160329142525.jpg" caption="" credit="Mike Lucas for Dow Jones" placement="Inline" suppressEnlarge="false" ] From this morning’s LBO Wire: AssetMark Inc., a financial technology company backed by Aquiline Capital Partners and Genstar Capital, found a new owner in Chinese brokerage company Huatai Securities LLC, Laura Cooper reports. The deal, slated to close before the end of the year, allows Aquiline and Genstar to exit the company about three years after they acquired it from Genworth Financial for some $412.5 million. Concord, Calif.-based AssetMark provides investment, relationship and practice management services to financial advisers. More stories available to LBO Wire subscribers: Carlyle Group raised $1.5 billion for its second fund focused on power assets…Level Equity is leading a $35 million growth funding round in vacation rental company Vacasa…And Kayne Anderson pledged $250 million to back newly formed oil and Continue reading "The Morning Leverage: Aquiline, Genstar Sell AssetMark to China’s Huatai Securities"

The Morning Leverage: Bridge Growth Takes Majority Stake in Solace Systems

[wsj-responsive-image P="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_P_20160329142525.jpg" J="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_J_20160329142525.jpg" M="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_M_20160329142525.jpg" caption="" credit="Mike Lucas for Dow Jones" placement="Inline" suppressEnlarge="true" ] From this morning’s LBO Wire: Bridge Growth Partners acquired a majority interest in Solace Systems Inc., a Canadian company providing hardware and software for data distribution, writes Laura Cooper. Ottawa-based Solace Systems provides virtual message routers, router devices and data messaging services for a variety of companies such as Barclays PLC, Royal Bank of Canada, the London Stock Exchange, telecommunications company Bharti Airtel and  enterprise software company SAP SE. More stories available to LBO Wire subscribers: Bain Capital is rebranding its credit affiliate Sankaty Advisors and its public equity unit Brookside Capital, according to a letter to investors viewed by LBO Wire…The California State Teachers’ Retirement System has $10.25 billion “tied up in boom-era private equity pools raised in the years leading up to 2008, Continue reading "The Morning Leverage: Bridge Growth Takes Majority Stake in Solace Systems"

The Morning Leverage: Thompson Street Sells Vaddio to Pritzker-Backed Milestone

[wsj-responsive-image P="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_P_20160329142525.jpg" J="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_J_20160329142525.jpg" M="http://si.wsj.net/public/resources/images/BN-NH707_ML_mai_M_20160329142525.jpg" caption="" credit="Mike Lucas for Dow Jones" placement="Inline" suppressEnlarge="false" ] From this morning’s LBO Wire: Milestone, a portfolio company of the Pritzker Group, acquired audio visual products maker Vaddio from Thompson Street Capital Partners, Laura Cooper reports. The sale provides an exit for Thompson Street, which recapitalized Minnetonka, Minn.-based Vaddio in 2011, and is the first add-on investment for Milestone since Pritzker backed the company in late 2013. More stories available to LBO Wire subscribers: Soundcore Capital Partners secured a $42.5 million credit facility to help fund more add-ons for Alloy Wheel Repair Specialists… VMG Partners teamed up with publicly traded TerraVia to form an algae-based food and consumer products platform TerraBrands…and Providence Equity Partners partnered with Dallas Cowboys owner Jerry Jones to purchase youth sports software company Blue Star Sports. (LBO Wire is a daily Continue reading "The Morning Leverage: Thompson Street Sells Vaddio to Pritzker-Backed Milestone"

The Morning Leverage: Brightstar Backs Tech Refurbishing Company

Mike Lucas for Dow Jones
From this morning’s LBO Wire: Brightstar Capital Partners acquired a majority stake in Global Resale LLC, a technology refurbishment company, for $50 million. The Austin, Texas, company rebuilds and refurbishes devices for manufacturers, carriers, resellers and corporate accounts. The company sells its devices through online retail, reseller and wholesale channels. Brightstar said its investment in Global Resale would enable the company to broaden its geographic footprint, launch online marketplaces and expand service offerings across products categories. More stories available to LBO Wire subscribers: Three Riverside Co. executives are preparing to strike out on their own to tap investment opportunities in the lower midmarket, writes Amy Or; partners Steve Dyke and Chris Jones and Rob Langley, a principal, aim to set up a new investment firm called Align Capital Partners…And the Oregon State Treasury raised its planned commitment to U.K. buyout firm Cinven’s sixth fund Continue reading "The Morning Leverage: Brightstar Backs Tech Refurbishing Company"

Private Equity Firms Take Control Amid Slower Growth in Asia

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Private equity firms in Asia-Pacific want a higher degree of control over their portfolio companies, as they seek to thrive in the face of slower economic growth and industry consolidation. “Previously it was much more about finding a decent company and they are going to do okay, but now it’s ‘what am I going to do to drive profit growth?’,” said Suvir Varma, who heads Bain & Co.’s Asia-Pacific private equity practice. Buyouts or majority stake investments accounted for $53 billion of Asian private equity deals last year, or about 42% of the $125 billion total, according to Bain’s third annual report on Asia Pacific private equity. The volume of majority stake purchases nearly doubled the $27 billion of majority investments in 2014. Slower growth in the region combined with heightened regulatory scrutiny have contributed to more demand for controlling stakes in companies rather than Continue reading "Private Equity Firms Take Control Amid Slower Growth in Asia"

The Morning Leverage: CVC Responds to Gender-Discrimination Claims

Mike Lucas for Dow Jones
From this morning’s LBO Wire: Pomona Capital is seeking $1.75 billion for its latest secondary fund, Pomona Capital IX LP, according a filing with the Securities and Exchange Commission. The previous fund in the series closed on $1.75 billion, above a $1.3 billion target, in 2014. The firm’s seventh fund closed on $1.3 billion in 2009. More stories available to LBO Wire subscribers: Serent Capital and Fifth Street Finance Corp. hired investment banks to run a sale process for Cardon Outreach LLC, a provider of revenue-cycle management services, reports Amy Or, citing people familiar with the matter...Ares Management is in pole position to acquire Candescent Partners-backed Dermatology Associates of Tyler, Ms. Or writes…And Life sciences investor G. Steven Burrill and his investment firm, Burrill Capital Management, agreed to pay $5.79 million to settle Securities and Exchange Commission charges he Continue reading "The Morning Leverage: CVC Responds to Gender-Discrimination Claims"

Permira’s Dipan Patel Sees the Potential in Hidden Tech Gems

Ancestry.com LLC may be a household name nowadays for those interested in tracing their family lineage, but it wasn’t so much so in 2012. Permira Partner Dipan Patel, then an associate with the London private equity firm, recognized the potential for the online genealogy platform to one day capture the interest of general public.
PatelDipan
Dipan Patel
“A lot of the underlying momentum was there to be seen in the data the company had, but it took some work to get at it,” said Brian Ruder, a partner who co-heads Permira’s technology team. “Dipan was able to see that and articulate it.” Permira invested in Ancestry.com, of Provo, Utah, in a $1.6 billion deal. Other private equity investors in technology had the chance to look at the asset, but passed on concerns that interest in genealogy would be a fad. Mr. Patel—a 33-year old Permira executive who Continue reading "Permira’s Dipan Patel Sees the Potential in Hidden Tech Gems"

The Morning Leverage: Moelis Set to Sell Medical Practice Management Business

Mike Lucas for Dow Jones
From this morning’s LBO Wire: More than a year after NAPA Management Services Corp. began planning for a sale, the Moelis Capital Partners-backed medical practice management company may soon have a new owner, reports Laura Cooper. American Securities was granted early antitrust clearance by the Federal Trade Commission to buy a stake in NMSC Holdings Inc., according to a regulatory filing. NAPA Management Services is the medical practice management arm of North American Partners in Anesthesia. The Melville, N.Y., parent company provides preoperative and anesthesia services to ambulatory surgery centers, office-based practices, community-based hospitals, academic medical centers and specialty hospitals, among others facilities. More stories available to LBO Wire subscribers: Carried-interest fees help make sure private equity managers stay motivated later in a fund’s life, a study by private equity fund-of-funds manager Pantheon suggests…And Black Diamond Capital Management agreed to acquire two Continue reading "The Morning Leverage: Moelis Set to Sell Medical Practice Management Business"

The Morning Leverage: How Carry Fees May Motivate Better Returns

Mike Lucas for Dow Jones
From this morning’s LBO Wire: Investors would like to reduce them and some lawmakers want to tax them more, “but carried-interest fees help make sure private equity managers stay motivated later in a fund’s life,” writes Chris Cumming, citing a study by fund-of-funds manager Pantheon. The fee and its tax treatment have long generated controversy. Limited partners have in some cases pushed for reduced carry, and legislators have sought for years to increase the tax rate that fund managers pay on their carried-interest income. But the carry fee remains because many investors see it as a means of aligning general partners’ interests with their own–the better the fund performs, the more the fund managers get paid. Pantheon’s study suggests that the fees do indeed meet this goal. More stories available to LBO Wire subscribers: Falfurrias Capital, founded by a team of former Bank of Continue reading "The Morning Leverage: How Carry Fees May Motivate Better Returns"

The Morning Leverage: Frazier Healthcare Wraps Up First Dedicated Fund

Mike Lucas for Dow Jones
From this morning’s LBO Wire: Frazier Healthcare Partners’ growth buyout team received a big vote of confidence for its first dedicated fund, writes Laura Kreutzer. The Seattle firm  held a final close on $525 million for Frazier Healthcare Growth Buyout Fund VIII LP, its first vehicle focused exclusively on lower midmarket health-care deals. More stories available to LBO Wire subscribers: Allscripts Healthcare Solutions Inc. and GI Partners are teaming up to acquire health-care information technology company Netsmart Technologies Inc. from Genstar Capital…And the New Jersey State Investment Council is considering an increase to its private debt allocation while scaling back on credit-focused hedge funds. (LBO Wire is a daily newsletter with comprehensive analysis of all the investments, deals, fundraisings and personnel moves involving private equity firms. For a two-week trial, visit http://on.wsj.com/DJPEVCNews, scroll to the bottom and click “try for Continue reading "The Morning Leverage: Frazier Healthcare Wraps Up First Dedicated Fund"

The Morning Leverage: Bunker Hill Sells Smith & Wollensky After Nine-Year Hold

Mike Lucas for Dow Jones
From this morning’s LBO Wire:
Nine years after it acquired restaurant chain Smith & Wollensky Restaurant Group Inc., Boston-based Bunker Hill Capital is ready for the check. The lower midmarket private equity firm is selling the restaurant chain to Irish investment firm Danu Partners, Chris Cumming reports for this morning’s LBO Wire. Bunker Hill initially acquired the chain, which offers menu items that include Bone-In New York Cut Sirloin & Angry Lobster Tail, in 2007 for about $94.6 million, Dow Jones previously reported. More stories available to LBO Wire subscribers: FTV Capital said it has invested $30 million in Edgewater Markets, a foreign exchange aggregator and distributor…LLR Partners has backed cloud-based software-as-a-service provider benefitexpress…and Trivest Partners gets regulatory clearance to sell a stake in fast lube chain Take 5 Oil Change Inc. to fellow private equity firm Roark Capital. (LBO Wire is a Continue reading "The Morning Leverage: Bunker Hill Sells Smith & Wollensky After Nine-Year Hold"

The Morning Leverage: SeaWorld to Stop Breeding Orcas

Mike Lucas for Dow Jones
From this morning’s LBO Wire: Active Network LLC, a Vista Equity Partners-backed maker of planning software primarily for sports, outdoor and community events, sold its faith division, which includes software for church administrative functions called Fellowship One, to Ministry Brands, a company backed by Providence Equity Partners that provides software to faith-based organizations. More stories available to LBO Wire subscribers: Norwest Equity Partners is exploring a sale of Surgical Information Systems LLC, a software provider focused on the perioperative process, writes Amy Or…A group led by Amsterdam-based AlpInvest Partners bought out investors of a 2008 fund run by Thomas Lee’s private equity firm, Lee Equity Partners, as part of a $1.2 billion deal, report Yolanda Bobeldijk, Chris Cumming and Dawn Lim…And Riverside Co. agreed to invest in Guestline Ltd., a U.K. provider of cloud-based software for the hospitality sector. (LBO Wire is Continue reading "The Morning Leverage: SeaWorld to Stop Breeding Orcas"

The Morning Leverage: U.S. Funds Post First Negative Return in Three Years

Mike Lucas for Dow Jones
From this morning’s LBO Wire: Private equity funds performed poorly for the third quarter of 2015, but they weren’t the worst performers, reports Amy Or. Cambridge Associates said U.S. private equity funds posted a negative return of 1.4% for the third quarter, the first quarterly loss in three years, but the consultant said the losses recorded were less severe than those in the public equities market. The S&P 500 index lost 6.4% during the third quarter, Cambridge said, as the market tumbled on concerns over China’s economic growth and its knock-on effect on the rest of the world. Cambridge’s U.S. Private Equity Index last recorded a loss in the second quarter of 2012, when it posted a negative 0.09% return, according to a Cambridge representative. More stories available to LBO Wire subscribers: Sixth Swedish National Pension Fund-backed Gyros AB and Continue reading "The Morning Leverage: U.S. Funds Post First Negative Return in Three Years"

The Morning Leverage: Beware the Ides of Oil and Gas Write-Downs

Mike Lucas for Dow Jones
From this morning’s LBO Wire: A soothsayer may have cautioned Julius Caesar to beware the Ides of March, but private equity firms with large exposures to the oil and gas space don’t need a psychic to know they are in for some pain. EIG Global Energy Partners has become the latest oil and gas focused firm to report losses, at least on paper, after marking down the value of its 2007-vintage fund, Shasha Dai reports for LBO Wire. As of the second quarter of 2015, the value of remaining assets in EIG Energy Fund XIV was down 34% from the value as of the same quarter in 2014, Ms. Dai reports. Although hedges against the price of oil helped bolster oil and gas deals against falling oil prices for a while, as lower prices have persisted, more private equity firms are reporting hits to their portfolios, Continue reading "The Morning Leverage: Beware the Ides of Oil and Gas Write-Downs"