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FFL buys healthcare MSP from 424 Capital; Bernhard’s Mark Spender on university ‘arms race’

Morning Hubsters, Craig McGlashan here with the Wednesday Wire.

We’re starting with a scoop, where we break the news that FFL Partners has acquired a healthcare-focused managed service provider from 424 Capital.

Next we have an in-depth look at the university sector, through the prism of Bernhard Capital Partners’ investment in program management company Brailsford & Dunlavey. Bernhardpartner Mark Spender walks us through the rationale behind the deal.

We then finish with a report that paints a complex picture of the consumer/retail sector, which is facing both head- and tailwinds as we head into the second half of 2024.

Healthcare services

PE Hub’s Rafael Cantonbroke the news this morning that FFL Partners has acquired Medicus IT, a healthcare-focused managed service provider (MSP), from 424 Capital.

Find out more about the deal in the subscriber version of the Wire.

‘Arms race’

Universities are racing to refurbish and maintain aging facilities as they compete with one another to attract and retain students, making the sector ripe for private equity investment, Mark Spender, partner at Bernhard Capital Partners, told Obey Martin Manayiti following his firm’s investment in Brailsford & Dunlavey.

Read the in-depth look at the deal in the subscriber version of the Wire.

Retail drop

We’ve seen plenty of action in the consumer/retail sector – today we’ve got West Lane Capital Partners acquiring San Diego-based cosmetic line Beauty Bakerie, while last week Rhone Capital portfolio company Hudson’s Bay Company agreed to acquire luxury retail company Neiman Marcus Group.

But the sector has been performing less well than other verticals, at least according to the latest Middle Market Report from direct lender and private credit manager Golub Capital, released yesterday.

Full details in the subscriber version of the Wire.

Right, that’s all from me today. Michael Schoeck will be in the chair tomorrow.

Cheers,

Craig

Read the full wire commentary on PE Hub ...

Also of note (may require subscriptions)

Cove Hill Partners, which raises funds with long-hold flexibility, amassed $1.9 billion for its third fund as it exceeded its target within three months of hitting the market, sources told Buyouts.

Private Equity International has another one of its excellent, infographic-driven 'Number Crunch' stories. This time we get a look at the Nordic PE market, which, despite a recent drop in deal activity and fundraising, has been catching the eyes of investors due to attractive returns.

Duration Capital Partners has completed its spin-out from Oaktree Capital Management, taking with it an 18-member team of full-time employees, a client base of roughly 70 LPs, two transportation funds and roughly $3.7 billion in AUM. The firm, in which Oaktree will retain a 25 percent stake, will be led by co-CEOs Emmett McCann and Josh Connor. (Infrastructure Investor)

BlackRock has secured an investment from tech giant Google into one of its renewable energy portfolio companies, as operators of data centers continue to seek clean energy to power their assets. (Infrastructure Investor)

When it comes to valuing portfolio companies, GPs may have developed their own tricks to prevent drastic markdowns of their underperforming assets. That’s one of the main findings from a report by Clipway, a London-based secondaries buyer that uses generative artificial intelligence and machine learning to process data in LP portfolio sales. (Private Equity International)

They said it

“What makes Medicus IT so compelling is really the combination of what they offer across managed IT, managed cybersecurity and managed compliance as well as the focus they have brought to their strategy and execution.”

— Jonathon Bunt, partner, FFL Partners