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Happy Friday! 

How'd your week go? On Monday I'll be leaving for Washington for the EMPEA/IFC
Global Private Equity Conference. If you're heading down, look for me and say hi! 

Emerging: We have an emerging manager out with its sophomore effort. PeakEquity Partners, launched in 2014 by former executives from Apax and the corporate world, is targeting $250 million for its second fund. The firm invests in enterprise software and solutions. Check it out here.

Somewhat related to this, I'm starting to compile our annual list of the most talked-about first-time managers. This list is based on LP recommendations, so it's curated. Let me know if you have some thoughts on first-time (or second-fund) managers who should be on the list. Here's the earlier version of the list from last year. Reach me at cwitkowsky@buyoutsinsider.com

Family room: Family offices are looking for exposure to the world of impact investing. LeapFrog Investments just announced the close of its third fund on $700 million, beating its $600 million target. Part of its expanding LP base includes family offices, with about 15 of them taking part in Fund III, up from around five in the last pool, according to Nick Moon, head of IR at LeapFrog. 

“They don’t tend to invest particularly large checks in the grand scheme of things, but what we’ve found is that they’ve been very interested in profit-with-purpose type of strategies, whereby they can do good in terms of social output as well as meet their required returns,” Moon told family office reporter Justin Mitchell. Check out the story here

Big issue: I've been in conversations with a few folks about the challenge of deal attribution and track record for new managers since I wrote about Navab Capital earlier this week. 

Seems I hit a nerve raising the issue of how a first-time manager can present his or her performance and experience. Most private equity firms keep performance locked up tight and don't allow leaving executives to tout the numbers while they try to raise their own funds. 

One source said this protectionism has only gotten tighter as more firms sell minority stakes of themselves to third party investors. "Now that PE firms have an enterprise value and a buyer for that equity, the partnerships have grown increasingly reluctant to provide attribution to people wanting to leave. That track record is part of the brand and intangible value for selling a GP stake," the source wrote.  

Leaving executives have various ways to deal with proving their past performances -- mostly involving pointing new LP prospects to publicly available information like news releases that show boards they served on. 

"I've ... seen managers that can basically create a track record from public disclosures. The original firm wanted a sign-off on it, but it was OK'd and subsequently used to raise a $1 billion-plus fund. So there are solutions to this conundrum outside of megabuyout-fund land," one reader wrote. 

The reader said they have also seen a situation where a first-time fund was able to construct a track record with the support of the previous fund. 

Another source told me: "For managers without attribution, something can often be cobbled together – though not often in a form that can be detailed in a PPM. However, LPs seeking to verify the spinout manager's role in every deal they claim may face the daunting task of doing reference checks with every CEO and/or CFO of every portfolio company. ... Most LPs are buried under a raft of opportunities, and unless they find the proposed new fund extremely compelling it is often easier to move on to something else they are being presented with without as much hair on it."

Letters: A few days ago we got into the idea of prior firms providing attribution letters to leaving executives. That doesn't appear to be a widespread practice, according to numerous sources I've talked to or who have written in. 

But it can be a nice solution for both the leaving executive and the prior firm, which through an attribution letter gets to lay out the deals the leaver was involved in. This documented background, even without providing performance information, sets the parameters of what the  on and prevents them from going beyond those bounds in their discussions with prospective LPs. 

What have you seen around such letters? I'm going to be asking about this issue for the next few days. Hit me up at cwitkowsky@buyoutsinsider.com

Book: Somehow I've found myself caught up in reading conspiracy-related non-fic, including a book about a journalist who was killed as he was researching what he believed was a government conspiracy related to arms and drug sales. Book is called "The Last Circle" and it's an interesting read, if you're into that kind of thing. 

That's it! Have a great weekend. Reach me with tips n' gossip, feedback, Scotch recommendations or whatever at cwitkowsky@buyoutsinsider.com, on Twitter @chriswitkowsky or find me on LinkedIn. 

Announcing the updated and expanded Guide to Independent Sponsors, 2nd Edition! Easily connect with deal partners and investors from the Independent Sponsor surging asset class with the newest guide. Pre-order your copy here before the guide ships on 5/21/19 for an exclusive pre-sale discount.  

Housekeeping
: Are you an emerging manager or an investor who works with EMs? Don’t miss your opportunity to get our latest EM benchmarking report for free! Simply take our 15-minute survey: Survey for investors | Survey for fund managers

Conference: Join us as we kickoff the upcoming, Family Office Connect: PE Deals, Funds and the Land of OZ conference on May 21 -22 at New York’s Harvard Club. Make plans now to join the expected 300+ professionals for 1 ½ days of networking & discussions on capital-raising, deal-making, deal-sourcing & opportunity zones with independent sponsors, family offices, LPs, GPs and service providers. Register NOW!

Looking for valuable employee compensation data? Participate in our ninth annual Holt-MM&K-Buyouts Insider PE/VC compensation survey and receive a free executive summary. Plus, you will be able to purchase the full report at a 45 percent discount. The survey is designed to be filled out by CFOs, directors of human resources or managing general partners on behalf of all the employees of their firms. The deadline to return your survey to jweitemeyer@buyoutsinsider.com is Friday, May 31Take the survey now

 
Today's  Take  

Gender equity: PE can do a lot better

By Tyler Newton, Catalyst Investors  No one these days needs statistics to show that private equity and venture capital are too male-dominated. But here they are, from Bella Private Markets, showing that females control only 3.4% of the assets in PE. Go to investment-firm websites and see how many women are on the investment teams. That’s […]
Read more...  

PE HUB First Read

First Read closes out the week with news that Facebook co-founder Chris Hughes calls for Facebook to be broken up, Uber priced at $45 per share, the low end of its range and investors suing JP Morgan may redefine the leveraged loan market.
Read more...  

PE HUB Second Opinion

In Second Opinion, smartphone shipments hit a five-year low in North America, Kraft Heinz launches sale of its baby food unit and Chevron exits bidding for Anadarko, ceding victory to Occidental.
Read more...  

PE HUB Healthcare Wire Highlights, 5.9.19

Opportunity emerges at nexus of regenerative medicine, medical device segments
Read more...  

PE HUB Wire Highlights, 5.9.19: UPDATED

A-Rod talks deals, JLO Enterprises at InterGrowth; Edgewell buys Harry’s for $1.37 bln; Metalmark weighs Collagen sale
Read more...  

VC-backed Auto I.D. seeks buyer

Venture capital-backed Auto I.D., which provides “information beyond the VIN,” is up for sale, two sources said. FT Partners is advising on the process, the sources said. Sean Smith, an auto industry executive, founded Auto I.D. in 2012 and is CEO. The Nashville company’s software enables users — typically a lender, an auto finance company or […]
Read more...  

CalSTRS adds new PE benchmarks, discusses hiring plans

California State Teachers’ Retirement System approved new benchmarks for its private equity investments, hoping to better capture its expected returns from fund-of-fund mandates and new strategies like long-hold investments. The CalSTRS investment committee approved the PE policy at its May 8 meeting, updating benchmarks for three traditional PE-asset classes — buyout, venture capital and debt-related — as […]
Read more...  

PeakEquity, with Apax operational pedigree, eyes $250 mln for sophomore fund

PeakEquity Partners, launched by former executives from Apax Partners and the corporate world, is targeting $250 million for its second fund, a person with knowledge of the firm told Buyouts. Fund II has been on the market for around two or three months, the person said. How much the fund has raised so far is […]
Read more...  

CalSTRS adds new PE benchmarks, discusses hiring plans

California State Teachers’ Retirement System approved new benchmarks for its private equity investments, hoping to better capture its expected returns from fund-of-fund mandates and new strategies like long-hold investments. The CalSTRS investment committee approved the PE policy at its May 8 meeting, updating benchmarks for three traditional PE-asset classes — buyout, venture capital and debt-related — as […]
Read more...  

LeapFrog hauls in $700 mln for Fund III, expands FO exposure

LeapFrog Investments closed its third fund on $700 million, beating its original target, with a plan to continue its goal of making impact investments in Africa and Asia. The fund, which LeapFrog called the largest-ever PE fund by a dedicated impact-fund manager, has already made five investments: WorldRemit, a digital remittances company, NeoGrowth, an India-focused credit […]
Read more...  

Family Office Connect: PE Deals, Funds, & the Land of OZ
May 21-22, 2019
Harvard Club, New York

This one-of-a-kind gathering of family offices, independent sponsors, GPs and LPs will focus on exclusive deal flow and fundraising, opportunity zone deals, interactive roundtables, specialist panel discussions and plenty of networking opportunities


Register Now


 
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VC Deals
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Understory procures $5.25 mln Series B

Understory, a weather network and analytics company, has secured $5.25 million in Series B funding. True Ventures led the round with participation from 4490 Ventures and Revolution’s Rise of the Rest Seed Fund.
Read more...  

Overhaul Group pulls in $7 mln

Overhaul Group Inc, a supply chain integrity solutions provider, has secured $7 million in funding. The investors included Abbey International Finance.
Read more...  

Twentyeight-Seven Therapeutics nabs $15 mln

Sofinnova Partners has led a $15 million round for Twentyeight-Seven Therapeutics Inc. Also, Osage University Partner participated in the financing. Based in Watertown, Massachusetts, Twentyeight-Seven Therapeutics is a biotech company focused on the modulation of RNA to treat cancer and other human diseases.
Read more...  

Evident ID snags $20 mln Series B

Evident ID Inc, a platform that powers identity and credential verification for many of the world’s fastest-growing companies, has raised $20 million in Series B financing. Aspect Ventures led the round.
Read more...  

Neural Analytics lands $22 mln

Los Angeles-based Neural Analytics Inc, a medical robotics company, has raised about $22 million in funding. Alpha Edison was the lead investor.
Read more...  

Cyber insurance firm Coalition inks $40 mln

San Francisco-based Coalition, a cyber insurance company for small and mid-sized businesses, has raised $40 million in funding. Ribbit Capital led the round with participation from Greenoaks Capital and Hillhouse Capital.
Read more...  

Pulmonx Corp scores $65 mln

Redwood City, California-based Pulmonx Corporation, a provider of diagnostic and therapeutic pulmonary device technologies, has raised $65 million in financing. Ally Bridge Group led the round with participation from other investors that included RTW Investments, ArrowMark Partners and Driehaus Capital Management. In addition to the funding, Pulmonx has appointed Dr. Derrick Sung as its chief financial officer.
Read more...  
Mark Your Calendars!
PartnerConnect Event's 2019 Calendar is here!


Family Office Connect: PE Deals, Funds & the Land of OZ- May 21-22nd, NYC
PartnerConnect Midwest- June 24-26th, Chicago
Emerging Manager Connect - July 23rd, NYC
PartnerConnect West- September 23-25th, San Francisco
 Family Office Connect- October 29-30th, NYC
PartnerConnect Texas- December 9-11th, Dallas
PE Deals sponsored by  
 
Back to Top

Gender equity: PE can do a lot better

By Tyler Newton, Catalyst Investors  No one these days needs statistics to show that private equity and venture capital are too male-dominated. But here they are, from Bella Private Markets, showing that females control only 3.4% of the assets in PE. Go to investment-firm websites and see how many women are on the investment teams. That’s […]
Read more...  

Reverence Capital to buy Advisor Group from Lightyear, PSP

Reverence Capital Partners said May 9 that it agreed to buy Advisor Group Inc. Financial terms weren’t announced. Reverence is buying 75 percent of Advisor Group. Lightyear Capital and PSP Investments, the sellers, will have 25 percent. Advisor Group Inc is a wealth management platform that supports over 7,000 financial advisors with $268 billion of client assets.  Centerbridge Partners LP was is in talks to buy Advisor Group for more than $2 billion, Bloomberg reported in April.
Read more...  

J.F. Lehman sells API to AEA Investors

AEA Investors has acquired Marlborough, Massachusetts-based API Technologies, a maker of high-performance components and subsystems for demanding RF/microwave and electromagnetic spectrum management applications. The seller was J.F. Lehman. No financial terms were disclosed. Evercore Group LLC and Houlihan Lokey Capital Inc served as financial advisers to J.F. Lehman on the transaction with Blank Rome serving as lead legal counsel.
Read more...  

Littlejohn to take majority stake in Outcome Health

Littlejohn & Co LLC is acquiring a majority stake in Outcome Health, a healthcare innovation company. No financial terms were disclosed.
Read more...  

North Branch invests in Diversified Fall Protection

North Branch Capital has made an investment in Westlake, Ohio-based Diversified Fall Protection, a maker of engineered fall protection systems for regulatory driven, mission critical safety applications. No financial terms were disclosed.
Read more...  

Monomoy acquires Kauffman Engineering

Monomoy Capital Partners has acquired Lebanon, Indiana-based Kauffman Engineering Inc, a maker of of highly-engineered wire harnesses and cable assemblies for electrical systems across the HVAC, commercial equipment, specialty vehicle, lawn care, marine, medical and other industrial markets. No financial terms were disclosed. KPMG Corporate Finance LLC provided financial advice to Kauffman Engineering on the deal while Faegre Baker Daniels LLP provided legal counsel.
Read more...  
PROMOTE YOUR BRAND! GENERATE AWARENESS!  SELL YOUR PRODUCTS & SERVICES! 
 
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IPOs
 
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VC-backed NextCure rolls out IPO

NextCure Inc, a biopharmaceutical company focused on treating cancer, has raised $75 million for its IPO after pricing its 5 million shares at $15 per share. The stock began trading May 9, 2019 on the NASDAQ under the ticker symbol "NXTC." Morgan Stanley, BofA Merrill Lynch and Piper Jaffray & Co are the lead underwriters. NextCure's pre-IPO backers included OrbiMed, Sofinnova Investments, Hillhouse Capital and Lilly Asia Ventures.
Read more...  

Axcella Health debuts IPO

Cambridge, Massachusetts-based Axcella Health Inc, a biotech company, has raised $71.4 million for its IPO after pricing its over 3.5 million shares at $20 per share. The stock began trading May 9, 2019 on the NASDAQ under the ticker symbol "AXLA." Goldman Sachs, J.P. Morgan and SVB Leerink are the lead underwriters. Axcella's pre-IPO backers included Gurnet Point Capital, Flagship Pioneering and Enso Ventures.
Read more...  

VC-backed Cortexyme goes public

South San Francisco-based Cortexyme Inc, a developer of drugs focused on treating Alzheimer’s disease and other degenerative diseases, has debuted its IPO after pricing its over 4.4 million shares at $17 per share. The stock began trading May 9, 2019 on the NASDAQ under the ticker symbol "CRTX." BofA Merrill Lynch and Credit Suisse Securities (USA) LLC are the lead underwriters. Cortexyme's pre-IPO backers included Sequoia Capital, Vulcan Capital, Verily Life Sciences, EPIQ Capital Group, RSL Investments, Huizenga Capital, Pfizer, Takeda Ventures, Lamond Family, Breakout Ventures and Dolby Family Ventures.
Read more...  

Permira plans IPO of software firm TeamViewer, says source: Reuters

Private equity firm Permira is planning an initial public offering of German software company TeamViewer, which could value the company at up to 5 billion euros ($5.60 billion), a source told Reuters.
Read more...  

Uber to price blockbuster IPO against grim market backdrop: Reuters

Uber Technologies Inc will price its initial public offering on Thursday, the most high-profile U.S. listing since Facebook Inc seven years ago, against a backdrop of turbulent financial markets and the plunging share price of its U.S. rival Lyft Inc,Reuters reported.
Read more...  
M&A Deals  
 
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New-Indy acquires Proactive Packaging and Display

New-Indy Containerboard LLC, a joint venture between Schwarz Partners LP and Kraft Group LLC, has acquired Ontario, California-based Proactive Packaging and Display, a provider of corrugated display packaging and merchandising formats for the retail environment. No financial terms were disclosed. Mesirow Financial served as financial adviser to Proactive on the deal. Proactive was backed by CK Pearl.
Read more...  

PE-backed Redwood Logistics buys Eminent Global Logistics

Redwood Logistics, which is backed by CI Capital Partners, has acquired Horsham, Pennsylvania-based Eminent Global Logistics, a provider of transportation management systems implementation and integration services. No financial terms were disclosed.
Read more...  

Edtech company Kahoot acquires DragonBox

Edtech company Kahoot said it acquired DragonBox, a Norwegian maker of math apps.
Read more...  

Pfizer to buy VC-backed biotech firm Therachon

Pfizer has agreed to acquire Therachon, a biotech company focused on rare diseases, for $340 million upfront with an additional $470 million in contingent payments. Goldman Sachs is serving as financial adviser to Therachon on the deal with Cooley LLP and Homburger AG providing legal advice. And, Arnold & Porter and Lenz & Staehelin are serving as legal advisers to Pfizer. Therachon is backed by Novo Holdings, Cowen Healthcare Investments, Pfizer Ventures, Tekla Capital Management LLC, Versant Ventures, OrbiMed, Bpifrance and Inserm Transfert Initiative.
Read more...  

PE-backed Huntington Solutions completes RADVA buyout

Huntington Solutions has closed its previously announced acquisition of Virginia-based RADVA Corporation, a maker of packaging solutions for the medical, pharmaceutical and food industries. No financial terms were disclosed. Huntington Solutions is a portfolio company of Mill Point Capital.
Read more...  

PE-backed Single Digits buys Resolute Partners’ guest Wi-Fi business

Single Digits Inc, which is backed by GI Partners, has acquired Resolute Partners' guest Wi-Fi business. No financial terms were disclosed. As part of the deal, Single Digits will now provide high-speed internet access to about 100 additional locations in the hospitality, multi-dwelling units healthcare and government sectors in the U.S.
Read more...  

Hain Celestial to sell Hain Pure Protein to Aterian for $80 mln

Hain Celestial has agreed to sell its chicken and turkey business Hain Pure Protein to Aterian Investment Partners for $80 million. The deal is expected to close before June 30, 2019. Centerview Partners was financial adviser to Hain Celestial on the transaction.
Read more...  

PE-backed SnapAV to buy Control4 for about $680 mln

SnapAV, which is backed by Hellman & Friedman LLC, has agreed to acquire Control4, a provider of smart home solutions, for $23.91 per share or about $680 million. The deal is expected to close in the second half of 2019. Simpson Thacher & Bartlett LLP is serving as legal adviser to SnapAV on the transaction while Raymond James & Associates Inc is serving as financial adviser to Control4 with Goodwin Procter LLP providing legal advice.
Read more...  
Real Estate
 
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Starwood to develop opportunity zone project in Bronx

Starwood Capital Group has agreed to develop a 147,000-mixed use opportunity zone project in the Bronx, New York. No financial terms were disclosed. Construction is expected to begin this month.
Read more...  
Firms & Funds
 
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Franklin Templeton raises $70.4 for Franklin Blackhorse VC fund

Franklin Templeton has raised $70.4 million toward its Franklin Blackhorse venture-capital fund, according to a filing with the SEC.
Read more...  

StraightPath Venture Partners is raising two $100 mln funds for investing in Pre-IPO companies

StraightPath Venture Partners, a New York City-based boutique private equity firm that specializes in pre-IPO investing and startup venture capital, is raising two venture funds of $100 million each, according to regulatory filings. The firm’s LPs are typically private investment funds investing in a range of high-tech, high-growth sectors, such as cloud computing, software-as-a-service, social media, banking, and […]
Read more...  

2048 Ventures collects $27 mln for initial fund

2048 Ventures has raised $27 million for its inaugural fund, according to a blog post on its site. The New York City-based venture firm invests in founders creating B2B and B2C companies.
Read more...  
Human Resources
 
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Gallant taps Kim as business development head

Gallant Capital has named Jamie Kim as head of business development. Previously, she worked at Presto where she was the vice president of corporate development and strategy.
Read more...  

HarbourVest recruits Royer as MD

HarbourVest Partners has named Bill Royer as a managing director. Also, Royer will become chief compliance officer in early June. Prior to joining HarbourVest, Royer was CCO at Vanguard Global Advisors.
Read more...  
Credit
 
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LBC Small Cap wraps up maiden fund at $139 mln

LBC Small Cap, an affiliate of LBC Credit Partners, has closed its first fund at $139 million. LBC Small Cap SBIC LP will focus on making senior, unitranche and mezzanine debt and equity investments between $4 million and $14 million.
Read more...  

Provepharm Life Solutions rakes in $47.6 mln

Provepharm Life Solutions, a French pharmaceutical and life sciences company, has secured a $47.6 million loan. The backers include Société Générale, BNP Paribas, Banque Populaire Méditerranée and Crédit Agricole Alpes Provence. The capital will be used for acquisitions.
Read more...  

BlackRock pulls out of rescue for Italian bank Carige: Reuters

U.S. fund manager BlackRock has pulled out of a proposed rescue of Italian bank Carige, a move that could push Rome’s fragile government into another costly state bailout, Reuters reported.
Read more...  
Odds & Ends + Hot Links 
 
Back to Top

PE HUB First Read

First Read closes out the week with news that Facebook co-founder Chris Hughes calls for Facebook to be broken up, Uber priced at $45 per share, the low end of its range and investors suing JP Morgan may redefine the leveraged loan market.
Read more...  

PE HUB Second Opinion

In Second Opinion, smartphone shipments hit a five-year low in North America, Kraft Heinz launches sale of its baby food unit and Chevron exits bidding for Anadarko, ceding victory to Occidental.
Read more...  

PE HUB Healthcare Wire Highlights, 5.9.19

Opportunity emerges at nexus of regenerative medicine, medical device segments
Read more...  

PE HUB Wire Highlights, 5.9.19: UPDATED

A-Rod talks deals, JLO Enterprises at InterGrowth; Edgewell buys Harry’s for $1.37 bln; Metalmark weighs Collagen sale
Read more...  
 
 
 
 
   
 
 
 
 
 
 
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