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Marketing & Advertising Pitfalls: What’s an Investment Adviser to Do?
In September 2017, we provided a summary of the SEC’s Advertising Risk Alert noting that the most common deficiencies cited were all related to misleading performance advertising. Now we will look more broadly at the marketing and advertising challenges advisers face and offer guidance on how to avoid common marketing and advertising pitfalls, namely the use of testimonials and endorsements, social media, and performance advertising. Rule 206(4)-1 (the “Testimonial Rule”) explicitly prohibits testimonials and endorsements of any kind. The SEC consistently interprets testimonials to include any statement expressing a client’s experience with an advisor or endorsement of an adviser. Testimonials imply that the experience of the client providing the testimonial is typical of the experience other persons might have working with that adviser. Such expressions are therefore considered to be misleading. Advisors to private equity funds must be mindful of the fact that the SEC has determined that favorable statements
Pharos Capital’s Family Treatment Network Acquires CCMC School
DALLAS and NASHVILLE, Tenn., June 13, 2018 /PRNewswire/ — Pharos Capital Group, LLC (“Pharos”), through its Family Treatment Network platform (“FTN”), announced today that it has acquired the CCMC School, based in New Britain, CT. Additional terms of the transaction were not disclosed. The CCMC School, an affiliate of Connecticut Children’s Medical Center, provides comprehensive special education for students, from age five to 21, who require intensive intervention due to a range of behavioral, emotional and learning challenges. The CCMC School, which will be known as Solterra Academy following the end of the summer 2018 session, serves more than 100 children annually. Pharos established its Family Treatment Network platform to manage its investments in special schools, psychiatric residential treatment centers and community-based programs for children, adolescents and their families. Gwen Killheffer, Ed.D., principal of the CCMC School, and her team of highly specialized and trained administrators, teachers, and clinicians will
Grain Management Acquires Telecommunications Provider
June 19, 2018 – Washington, DC – Grain Management, LLC (Grain), a leading private equity firm focused on investments in the communications sector, announced today that it has entered into a definitive agreement to acquire Great Plains Communications – the largest privately-owned telecommunications provider in Nebraska. “We are enthusiastic about the outstanding performance Great Plains Communications has delivered for its customers, and we are thrilled to partner with the current management team to continue pursuing their vision of being the region’s leading provider of high-quality, fiber-based telecommunications services,” said David Grain, Founder & CEO of Grain Management. Grain will acquire Great Plains Communications from its current owners, whose families have led the company’s growth since 1910, when it began as a local telephone company. Throughout its long history, Great Plains Communications has strategically transitioned itself into a leading regional provider of fiber-based services through significant investment in its state-of-the-art network and
Web.com to be Acquired by Siris Capital Affiliate in Deal Valued at Roughly $2 Billion
JACKSONVILLE, Fla, June 21, 2018 – Web.com Group, Inc. (NASDAQ: WEB), a leading global provider of a full range of Internet services and online marketing solutions for small and medium‐sized businesses, today announced that it has entered into a definitive agreement to be acquired by an affiliate of Siris Capital Group, LLC in an all-cash transaction valued at approximately $2 billion. Under the terms of the agreement, which has been unanimously approved by the members of Web.com’s board of directors, an affiliate of Siris will acquire all of the outstanding common stock of Web.com for $25.00 per share in cash. The purchase price represents a 30% premium over Web.com’s 90-day volume-weighted average price ended on June 19, 2018. A special meeting of Web.com’s shareholders will be held as soon as practicable following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission (“SEC”) and subsequent mailing
GTCR and Sycamore Partners Complete Acquisition of CommerceHub
May 21, 2018 – Affiliates of GTCR and Sycamore Partners, two leading private equity firms, today announced the closing of the acquisition of CommerceHub, Inc. (“CommerceHub” or the “Company”), a leading distributed commerce network for retailers and brands. “The closing of this transaction represents a new and exciting chapter for CommerceHub,” said Frank Poore, CommerceHub’s Founder, President and CEO, who will continue in these roles. “GTCR and Sycamore Partners each bring deep industry expertise to help us to execute our vision for the future of retail. Together, we look forward to accelerating the development of CommerceHub’s platform to transform how retailers and brands drive growth through ecommerce.” “CommerceHub benefits from a highly strategic position in ecommerce due to its differentiated platform that enables retailers’ most critical growth strategies,” said Mark Anderson, Managing Director of GTCR. “We are excited to build on CommerceHub’s momentum and deliver on its vision for a
Clearlake Capital Portfolio Company Acquires Automotive Products Provider
SANTA MONICA, CA and GREENWOOD VILLAGE, CO – June 4, 2018 – Wheel Pros, a leading designer, marketer, and distributor of branded automotive aftermarket wheels, performance tires, and accessories, today announced that it has completed the acquisition of Amcor Industries, Inc. (d/b/a Gorilla Automotive Products) (“Gorilla”), a leading designer and distributor of branded automotive aftermarket lug nuts and wheel locks. Financial terms of the transaction were not disclosed. Gorilla designs, manufactures, and sells branded lug nuts, wheel locks, and accessories to retailers across North America, adding a complementary portfolio of aftermarket accessories to Wheel Pros’ expanding selection of products. Wheel Pros currently serves more than 10,000 retailers with a global network of 33 distribution centers spanning North America and Australia. The Company has a portfolio of 12 proprietary brands with more than 300 custom wheel styles, including some of the most recognized designs in the industry. “We are excited to welcome
NAIC’s Open Letter to CalSTRS on Behalf of Diverse Investment Managers
WASHINGTON, June 7, 2018 – The National Association of Investment Companies (NAIC) today issued the following letter to Chief Investment Officer magazine in response to troubling material the media outlet reported on the California State Teachers’ Retirement System’s (CalSTRS) diversity and emerging manager programs. Because of its importance to the field, the NAIC is today making the letter public. Dear Reader, Reasonable people now find it incontrovertible that diversity improves outcomes. It is true for boards, it is true for leadership, and it is true for workforces. Nearly all leaders are past the point of debating whether to invest in diversity and focus their attention on how to do so. Yet, exceptions linger – particularly in asset management. An especially troubling example of this was reported in an April 3rd article in Chief Investment Officer reporting on CalSTRS’ negative experience with minority managers in the global equity portfolio. In its
NAIC Commends Investment Group for Recognizing Performance and Potential of Diverse-Owned Firms
WASHINGTON, June 4, 2018 – The National Association of Investment Companies (NAIC) congratulates Clearlake Capital Group and the investment group led by Dyal Capital Partners on the group’s recent acquisition of a minority stake in Clearlake Capital. This transaction exemplifies a clear recognition of the enormous success Clearlake Capital has achieved to date, and its potential for increased growth and outstanding investment returns. Clearlake Capital Group is a leading private investment firm founded in 2006 that has managed approximately $7 billion of institutional capital since inception. The transaction marks the second investment in an NAIC member firm by Dyal Capital Partners. In 2015, a Dyal-led group completed an investment in Austin-based Vista Equity Partners. “These transactions illustrate the increasing realization of the growth and potential for increased success of diverse managers,” says Robert L. Greene, President & CEO of the NAIC. “We anticipate similar transactions ahead as these firms continue
NAIC Roadshow to Connect Diverse-Owned Firms with DC Institutional Investors
WASHINGTON, MAY 21, 2018 – Some of the nation’s top-performing diverse investment managers will meet with institutional investors from the Washington, DC Metropolitan Area today to showcase how investing with minority-owned firms could lead to greater returns for retirement plans. Hosted by the National Association of Investment Companies (NAIC), the institutions represented at the Institutional Investor Roadshow include the District of Columbia Retirement Board; Georgetown University Investment Office; Howard University; Montgomery County Public Schools; National Railroad Retirement Investment Trust; and the Smithsonian Institution. NAIC’s Institutional Investor Roadshows visit various US cities to meet with local institutional investors and government officials to discuss manager performance, investment strategies, emerging manager programs, and to dispel outmoded perceptions about compromising performance when utilizing diverse managers. Many diverse-owned investment firms have generated stellar returns despite being overlooked by many institutional investors – even those located in racially diverse cities. Several factors continue to severely limit
NAIC Congratulates Members Ranked Among the World’s Largest Private Equity Firms
WASHINGTON, MAY 18, 2018 – The National Association of Investment Companies (NAIC) congratulates its 10 member firms named to the PEI 300, Private Equity International’s list of the world’s biggest private equity firms. The list, which is based on how much capital raised over the last five years, represents a collective fundraising total of $1.5 trillion. NAIC member firms named to the PEI 300 include: Clearlake Capital Group, L.P. HarbourVest Partners, LLC JP Morgan Asset Management Neuberger Berman One Rock Capital Partners, LLC Palladium Equity Partners, LLC Siris Capital Group, LLC Sycamore Partners Vista Equity Partners Vistria Group, LP “The NAIC is proud to see such growth among our members and applauds them on their fundraising successes,” says Robert L. Greene, President & CEO, “Having so many firms ranked among the world’s largest underscores the talent and capabilities within private equity’s diverse communities.” About the NAIC: Based in Washington, DC,