KKR today announced that it has led a $15 million Series A round for a New York-based tech startup. Yes, I know that sounds all sorts of strategy drift – like going from knitting fine cashmere sweaters to knitting holiday scarves for cats – but this is actually a strategic balance sheet deal through which KKR is hoping to bring more individual investors into its funds.
The company is called Artivest, and KKR was joined by RRE Ventures, Nyca Partners, Anthemis Group, FinTech Collective and Peter Thiel (Artivest founder and CEO James Waldinger used to work at Thiel's hedge fund, Clarium Capital).
It's basically a platform to form feeder funds of qualified purchasers (a step beyond accredited investors), which then flow into private equity and hedge funds (early sponsors using the platform include, of course, KKR). We've seen plenty of efforts like this before -- I was even recruited for one way back in 2001 -- but Waldinger and KKR chief information officer Ed Brandman (who is joining the Artivest board) insist that this is the right company at the right time:
"What's different is that they're onboarding marquee funds that people will recognize, and what's different in the market is the collapsing returns in fixed income and equity market peaks," Brandman says. "The alternatives market for many years has been talking about return profile, if you're willing to lock up capital for an extended period of time, and more individuals have heard that message and want to participate."
Waldinger adds: "There has been very fast and major growth in the independent RIA market. But RIA's now typically allocate between 3 and 5% to alternatives, and some surveys see that growing to 20 and 25%"
As you might imagine, the fees here are on the individual investors rather than on the funds themselves (much like in typical feeder fund arrangements).
• Update: SAP on Friday said publicly that "there is no truth whatsoever to the suggestion SAP is considering or ever did consider acquiring Salesforce.com." Or, put another way, SAP confirmed what we had reported the day before.
• Personnel scoop: Glen Matsumoto is leaving EQT Partners, where he had led EQT Infrastructure US since co-founding the group in 2007. He also had led the Sweden-based private equity firm's New York office. No word yet on his future plans.
His replacement as head of EQT Infrastructure US is Stefan Glevén, while the New York office will be led by Jan Ståhlberg.
• Beats by David: I had intentionally avoided watching last year's Carlyle Group video of David Rubenstein rapping (with Beats headphones on, of course), but somehow it snuck into last night's 60 Minutes profile on Rubenstein's patriotic philanthropy. Piece is worth watching by going here, but don't say I didn't warn you about its... ummm... musicality.
• In memoriam: By now you've probably heard that Dave Goldberg, CEO of SurveyMonkey and husband of Facebook's Sheryl Sandberg, passed away unexpectedly on Friday night. I didn't know Dave well, except for a few interviews and some back-and-forth over these morning missives (he was an occasional mailbag contributor). But I do know that I never heard anyone say a disparaging word about him, which is almost unheard of when it comes to super-successful people in Silicon Valley (which Dave most certainly was, even before marrying Sheryl). And, in death, the word used most to describe him has been 'kind.' May we all be so charitable in our lives as to have that be our legacy.
THE BIG DEAL
• AltSchool, a San Francisco-based network of micro-schools that emphasizes personalized learning for children in grades K-8, has raised $100 million in Series B funding (the deal also includes an undisclosed amount of debt). Return backers Founders Fund and Andreessen Horowitz co-led the round, and were joined by Mark Zuckerberg, Emerson Collective, First Round Capital, Learn Capital, John Doerr, Harrison Metal, Jonathan Sackler, Omidyar Network and Adrian Aoun. www.altschool.com
VENTURE CAPITAL DEALS
• AEGEA Medical Inc., a Redwood City, Calif.-based developer of water vapor treatment for abnormal uterine bleeding, has raised $36 million in Series C funding. BioMed Ventures and Solas Bioventures were joined by return backers Alloy Ventures, Delphi Ventures, and Covidien/Medtronic. www.aegeamedical.com
• Canva, an Australia-based online design platform, has raised US$6 million in new VC funding from Matrix Partners, Shasta Ventures, Blackbird Ventures and AirTree Ventures. www.canva.com
PRIVATE EQUITY DEALS
• AssuredPartners, a Lake Mary, Fla.-based insurance brokerage platform owned by GTCR, has acquired T.A. Cummings Jr. Co., a Skokie, Ill.-based property and casualty and personal insurance agency. No financial terms were disclosed. www.assuredptr.com
• GE Energy Financial Services and Caisse de dépôt et placement du Québec have agreed to acquire Southern Star Central Corp., an Owensboro, Ky.-based regulated interstate natural gas transmission and storage system, from Morgan Stanley Infrastructure. No financial terms were disclosed. www.southernstarcentralcorp.com
• Luxe Energy LLC, an Austin, Texas-based energy platform focused on West Texas and applying such technologies as long reach horizontal drilling and multi-stage fracking, has secured $500 million in private equity funding commitments from Natural Gas Partners. www.naturalgaspartners.com
• Peak Rock Capital has acquired Precision Valve Holdings Corp., a Rye Brook, N.Y.–based maker of aerosol valves, custom actuators and other dispensing solutions. No financial terms were disclosed. www.precisionglobal.com
• Precision Engineered Technologies LLC, a precision machining platform company owned by Joshua Partners, has acquired a controlling interest in Ray Industries LLC, a Waukesha, Wisc.-based precision parts and components manufacturer utilizing roll-threading technology. No financial terms were disclosed. www.joshuapartners.com
• Pure Barre, a Spartanburg, S.C.-based fitness club chain, has raised an undisclosed amount of growth equity funding from Catterton Partners. www.purebarre.com
• Slate Capital Group has acquired Broadcast Sports Inc., a Hanover, Md.–based provider of RF technology and communications systems services for sports television broadcasting, from L-3 Communications Corp. (NYSE: LLL). No financial terms were disclosed. www.slatecap.com
• Tricor Pacific Capital has acquired Gold Standard Baking, a Chicago-based maker of frozen laminated dough products, from Arbor Investments. No financial terms were disclosed. www.gsbaking.com
• Wunderlich Investment Co., a unit of Norway’s Coil Investment Group, has acquired Fiduciary Financial Services of the Southwest, a Dallas-based investment advisory firm with over $400 million in assets under management. No financial terms were disclosed. www.ffss.net
• Fenix Parts Inc., a Miami, Fla.-based recycler and reseller of OEM automotive products, has set its IPO terms to 11 million shares being offered at between $9 and $11 per share. It would have an initial market cap of around $166 million, were it to price in the middle of its offering range. The company plans to trade on the Nasdaq under ticker symbol FENX, with BMO Capital Markets and Stifel serving as co-lead underwriters. It reports $108 million in pro forma sales for 2014. www.fenixparts.com
• MasterCraft Holdings Inc., a Vonore, Tenn.-based sports boat maker, has filed for a $100 million IPO. Baird, Raymond James and Wells Fargo Securities are serving as co-lead underwriters. The company reports $20 million in net income for the fiscal year ending June 30, 2014, on $177.5 million in revenue. Wayzata Investment Partners holds a 95.41% pre-IPO ownership stake. www.mastercraft.com
• CVC Capital Partners and KKR have lost control of Dutch waste management company Van Gansewinkel Group to creditors, via a debt-for-equity restructuring. Read more.
• CECO Environmental Corp. (Nasdaq: CECE) has agreed to acquire PMFG Inc. (Nasdaq: PFMG), a Dallas–based environmental, energy and fluid handling technology company. The deal is valued at approximately $150 million, or $6.85 per share (48% premium over Friday’s closing price). www.pmfginc.com
• Fosun International has offered to acquire the 80% stake it does not already own in Bermuda-based insurer Ironshore Inc. for approximately $1.84 billion. It had purchased a 20% position last summer for $464 million. Read more.
• Goldman Sachs is in talks to sell its Colombian coal mines at a loss, according to the WSJ. Read more.
FIRMS & FUNDS
• CIVC Partners, a Chicago-based mid-market private equity firm, is raising upwards of $375 million for its fifth fund, according to a regulatory filing. Atlantic-Pacific Capital is serving as placement agent. www.civc.com
• The Ohio Police & Fire Pension Fund has withdrawn a $40 million LP commitment to Black Diamond Capital Management's $1 billion-targeted fourth fund “after further evaluation of the midsize distressed debt market." Read more.
• Signal Hill Equity Partners, a Canadian private equity firm, has closed its third fund with C$142 million in capital commitments. www.signalhillequity.com
MOVING IN, UP, ON & OUT
• Joe Almeida, former chairman and CEO of Covidien, has joined The Carlyle Group as an operating executive in its global healthcare group. www.carlyle.com
• Joe Rogers has joined Monroe Capital as an Atlanta-based managing director and head of its Southeast region group. He previously was with KPMG Corporate Finance as a managing director and group head of capital advisory and private placements. www.monroecap.com
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