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J.Crew wins approval to exit chapter 11 bankruptcy

Retailer poised to emerge from bankruptcy, will hand its business to a group of lenders

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Apparel retailer J.Crew Group has won approval for its plan to emerge from bankruptcy with a deal cutting its debt and handing ownership to a group of its lenders led by hedge fund Anchorage Capital Group.

Judge Kevin Phillips of the US Bankruptcy Court in Richmond, Virginia, said Tuesday he would confirm J.Crew’s chapter 11 plan of reorganisation in which lenders will swap about $1.6bn in debt for the company’s equity. The plan also provides for $400m in exit financing and $400m in new term loans to help fund the retailer going forward.

Apparel retailer J.Crew struggled for years with significant debt and avoided bankruptcy in 2017 by using a controversial debt swap that tapped the value of its brand name. Private equity firms TPG Capital and Leonard Green & Partners took over J.Crew a decade ago in a leveraged buyout but were unable to overcome shifts to fast fashion and consumers increasingly shopping online.

The coronavirus pandemic ultimately pushed New York-based J.Crew into chapter 11 in May and forced the retailer to temporarily close its stores and furlough thousands of workers. A number of other large retail chains including Neiman Marcus Group and J.C. Penney have also sought bankruptcy protection during the pandemic, which has put the retail industry under significant financial pressure.

The re-organisation authorised Tuesday is intended to give J.Crew a healthier balance sheet and help the retailer withstand the pandemic. The company said earlier this month that it has reopened 458 locations representing most of its J.Crew and Madewell stores and brought back the vast majority of its employees from furlough.

 J.Crew said it anticipates exiting chapter 11 bankruptcy in early September.

“The confirmation of our plan of reorganisation is another significant milestone in our path to transforming our business to drive long-term, sustainable growth for J.Crew and further advance Madewell’s growth momentum,” Chief executive Jan Singer said.

The lender group that helped fund J.Crew’s bankruptcy and that is in line to take over the business includes Anchorage, GSO Capital Partners and Davidson Kempner Capital Management.

The company said its chapter 11 plan had wide support from its creditors. J.Crew’s unsecured creditors, owed about $324m, are entitled to a portion of more than $75m being made available under the plan, according to court papers.

Soma Biswas contributed to this article.

Write to Jonathan Randles at Jonathan.Randles@wsj.com

From The Wall Street Journal

Source: https://www.penews.com/articles/j-crew-wins-approval-to-exit-chapter-11-bankruptcy-20200826

Private Equity

GI Partners buys Valet Living from Harvest Partners, Ares Management private equity arm

Buyout house GI Partners has bought doorstep waste, recycling and concierge services provider Valet Living from Harvest Partners and Ares Management’s private equity arm.

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Buyout house GI Partners has bought doorstep waste, recycling and concierge services provider Valet Living from Harvest

Source: https://www.altassets.net/private-equity-news/by-news-type/deal-news/gi-partners-buys-valet-living-from-harvest-partners-ares-management-private-equity-arm.html

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Private Equity

Bain Capital raises $800m for second impact investing fund

The Boston-based firm raised a substantially larger impact fund despite headwinds that have slowed capital inflows to such strategies

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Bain Capital has raised $800m in fresh capital to back businesses that the firm bets will benefit not only fund investors but also society at large.

Bain Capital Double Impact, the Boston firm’s impact investment unit, has raised its second fund as investment vehicles focused on generating environmental, social and governance benefits have faced their share of marketing headwinds.

Lockdowns and travel restrictions imposed as a result of the coronavirus pandemic have made fundraising more challenging as investors conducted due diligence remotely. At the same time, a new rule by the US Labor Department made it somewhat trickier for certain investors to back impact funds.

Global impact funds have attracted just $14.6bn across 52 managers so far this year through 20 November, well off pace from the $76.2bn raised across 92 such funds in 2019, according to data provider Preqin.

While temporary stay-at-home orders slowed the firm’s fundraising, Todd Cook, managing partner of Bain Capital Double Impact, said he believes investor interest in the strategy remains strong.

Bain Capital’s second Double Impact fund was more than double the size of the $390m the firm raised for its debut effort back in 2017. The firm brought on a number of new investors to its second impact fund, including from overseas. International investors accounted for around 25% of the new fund’s capital. Bain Capital’s own employees contributed around $75m.

The firm’s impact unit typically looks to invest $25m to $75m in equity per deal and focuses on three broad themes: environmental sustainability, health and wellness, and workforce development and education. Bain Capital typically takes controlling stakes in companies that are often already profitable, often backing three or four businesses each year.

“There are a lot of venture and growth equity investors in impact, but not a lot of investors taking already profitable companies and trying to scale them,” Cook said.

So far, Bain Capital has backed at least 12 portfolio companies through its debut fund, including a May investment in PresenceLearning, a New York-based provider of online special-education services for students in kindergarten through 12th grade.

The firm also successfully exited at least one of the investments it made through its debut offering. Last year, the team sold low-cost gym operator Impact Fitness to fellow private equity investor Morgan Stanley Capital Partners.

“We were able to accomplish what we thought would take four or five years in three or four years,” Cook said.

Not all of the firm’s investments have thrived, however, especially once the pandemic hit.

Sustainable Restaurant Holdings, which operates seafood restaurant chains Bamboo Sushi and QuickFish and was initially backed by Bain Double Impact in 2018, sought bankruptcy protection in May. Bain Capital Double Impact provided debtor-in-possession financing to the company, which was acquired out of bankruptcy in July by investment firm Sortis Holdings.

“Some [businesses] were impacted more by stay-at-home orders,” Cook said. “We’re looking to support the portfolio as best we can through all of this. We supported [Sustainable Restaurant Holdings] through the [bankruptcy] financing to allow it to [restructure] in a way that would provide for the business to continue as a going concern.”

Write to Laura Kreutzer at laura.kreutzer@wsj.com

From The Wall Street Journal

Source: https://www.penews.com/articles/bain-capital-raises-800m-for-second-impact-investing-fund-20201123

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Private Equity

Blackstone said to eye at least $5bn for second Asia private equity fundraise

Global buyout giant Blackstone is reportedly looking to raise at least $5bn for its second Asia-focused private equity fund.

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Global buyout giant Blackstone is reportedly looking to raise at least $5bn for its second Asia-focused private equity f

Source: https://www.altassets.net/private-equity-news/by-region/asia-by-region/blackstone-said-to-eye-at-least-5bn-for-second-asia-private-equity-fundraise.html

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