Morning Hubsters,\n\nHappy Fri-yay! John R Fischer here with the US Wire from the New York newsroom.\n\nApollo, Blackstone, The Carlyle Group and Hamilton Lane are among the PE firms toasting the current administration’s executive order allowing 401(k) investors to access alternative assets like private equity. Let’s look at some of these reactions and how the firms plan to approach these new opportunities.\n\nMoving over to refreshing drinks. Private equity is keen for assets in the beverage industry, a segment that has attracted the likes of Butterfly Equity, Brynwood Partners and Gryphon Investors, among other PE investors. PE Hub’s Iris Dorbian recounted the tailwinds behind PE’s appeal in the sector in her five-deal listicle.\n\nSwitching from beverages to oral hygiene for Friday Focus. We’ll take a look at KKR’s recap of a revenue cycle management company serving the US dental industry.\n\nWe’ll finish with a report by healthcare M&A database LevinPro HC. It details healthcare megadeals announced by Bain Capital, Clearlake Capital, GSK, Sixth Street and other PE firms in the first half of 2025, including their deal size.\n\n<h2>Alternative assets</h2>\n\nOpening up access to alternative assets through 401(k)s and other workplace retirement plans is a move many in the private equity industry have been applauding for weeks – although navigating how these plans will work out and how they will protect individual investors is still a long way away.\n\n“Everyone in the industry is enthusiastic,” Carlyle Group chief executive Harvey Schwartz said during the firm’s second quarter earnings call on Wednesday, before the EO was signed. Schwartz pointed out that wealthy clients, as well as firefighters and teachers through their pension plans, have had access to the asset class previously. “This is going to open up a space which is long overdue… We’re super enthusiastic about the momentum here.”\n\nThe EO is expected to “help open another vast new market for the firm…the $12 trillion US defined contribution channel,” Blackstone CEO Stephen Schwarzman said in the firm’s second-quarter earnings call in late July.\n\nOver the last two weeks, PEI Group reporters and editors have been listening in on PE firm earnings calls and reaching out to a wide range of sources for reactions to the move.\n\n“It’s going to be about large-scale perpetuals,” said Jonathan Gray, president and COO of Blackstone. “It’s going to be about firms with brand names and the right legal approaches and track records that capital can get allocated to.”\n\n“In terms of where it’ll happen…it’s logical that it happens more in the target-date funds,” said Gray. “It’s obviously more appropriate for somebody earlier in their lifespan as opposed to somebody just on the cusp of retirement. And so, I think the target-date funds is where we’ll see this initially take hold.”\n\n“Private credit is rapidly moving from Wall Street to Main Street,” said Marc Pinto, global head of private credit, Moody’s Ratings. “Providing access to the trillions of dollars of ‘patient’ capital in US retirement funds to the private equity industry is likely to give rise to a proliferation of new products, like so-called ‘evergreen funds’ and ETFs, which contain greater liquidity features – but this is not without risk.\n\n“Potential mismatches between illiquid assets and flexible withdrawal features, valuation concerns, and limited knowledge of this investment among retail investors means more oversight and protection measures for future retirees are on the table. If these new investments don’t live up to their promise, asset managers could face lawsuits and regulatory heat.”\n\nFor more reactions from PE pros, check out the full article.\n\n<h2>Liquid refreshment</h2>\n\nWith thirst being an innate part of life, it stands to reason that the constant human demand for libation makes it a recession-resistant bet for private equity firms. It’s no surprise, then, that since the beginning of this year, there has been a steady deal volume in this segment. Whether it’s Butterfly Equity-backed Generous Brands snapping up kombucha tea beverage brand Health-Ade or Boyne Capital investing in Blue Monkey Beverages, the investor appetite has been insatiable.\n\n“Within the beverage sector, Butterfly remains very focused on tailwinds in favor of premiumization and functionality,” said Adam Waglay, co-founder and co-CEO of Butterfly, when asked about his firm’s keen interest in the segment. “Consumers are very focused on the product quality and benefits that they get out of the beverages that they consume. Health-Ade is very well positioned in this regard.”\n\nLast year, PE Hub covered the brisk deal volume in this sector in its round-up of five PE-backed deals. This year, the trend continues, with reporter Iris Dorbian having rounded up five notable deals in the segment. Here is one of them:\n\nAzalea Capital invests in Pickle Juice. In early June, Azalea Capital stated it was making an undisclosed growth investment in Pickle Juice, a Mesquite, Texas-based beverage brand.\n\nPickle Juice’s new CEO, Filip Keuppens, hailed the deal for the many benefits it will accrue for the brand.\n\n“This partnership is more than capital — it’s a green light to scale with integrity,” said Keuppens in a statement.\n\n“Azalea shares our values of trust, culture and long-term growth. Their decision to invest without restructuring the leadership is a testament to the strength of our team and the success we’ve built together.”\n\nPickle Juice was founded in 2001.\n\n<h2>Friday Focus</h2>\n\nEarlier this week, KKR made a recapitalization in DentalXChange, a provider of revenue cycle management solutions for the US dental market. Bregal Sagemount exited the investment.\n\nDXC operates out of Irvine, California, and processes more than two billion transactions annually and helps dental practices navigate the complexities of dental RCM.\n\nAs part of the recapitalization, KKR will support DXC to create a broad-based equity ownership program, which will provide equity to all employees at the Company, enabling the full DXC team to participate in growth and value creation.\n\nAdministrative burdens from managing insurance claims, patient billing and collections are driving dental practices to seek RCM technologies that can help standardize practice management across multiple locations, as well as improve scale and efficiency. Dental practices are also struggling with increased operational expenses and limited reimbursement rates, which impacts their profit margins.\n\nThis aligns with dental groups shifting their focus from M&A growth towards maximizing the performance of existing locations. Because of this, PE investors see opportunities to consolidate fragmented dental support organizations that provide RCM services to help meet these demands. New technologies, such as AI and data analytic applications, are also driving PE investments in the RCM market in general.\n\nFor more on the dental sector, check out my colleague Sophie Rose’s piece that compiles eight recent deals in the segment.\n\n<h2>Going big</h2>\n\nThe first half of 2025 saw the lowest mid-year tally of healthcare megadeals since 2020, with 18 recorded, down from 27 in H1 2024, according to Megadeals in Healthcare: A 2025 Mid-Year Review and Outlook report by LevinPro HC, an affiliate of publisher LevinPro Associates.\n\nDespite this, the report listed a sizeable number of PE-backed healthcare megadeals announced in H1 and their deal size. They include:\n\nSanofi acquires Sixth Street-backed Blueprint Medicines for $9.1 billion\nBrookfield and CDPQ snap up Antylia Scientific for $1.34bn\nClearlake Capital backs ModMed\nInvestindustrial to buy DCC’s healthcare unit at £1.1bn EV ($1.41 billion)\nSiemens acquires Insight Partners-backed Dotmatics for $5.1 billion\nInsight Partners to sell CentralReach to Roper Technologies for $1.65 billion\nBain Capital to acquire Tanabe Pharma in a carveout from Mitsubishi Chemical Group for $3.3 billion\nCourt Square and Windrose invest in Soleo Health for $1.1 billion\nPureHealth acquires Hellenic Healthcare Group from CVC Capital Partners for $2.3 billion\nGSK acquires Blackstone-backed IDRx for over $1 billion\n\nWell, that’s it for me. As always, if you have questions, comments, or just want to chat, you can email me at [email protected].\n\nNina Lindholm will be in the Europe chair on Monday, while MK Flynn is on US Wire duty.\n\nCheers, John R. Fischer

Apollo, Blackstone, Carlyle, KKR celebrate expanded access to 401(k) investing; Brynwood, Butterfly and Gryphon target beverage deals

Private equity firms including Apollo, Blackstone, The Carlyle Group, and Hamilton Lane are celebrating the U.S. executive order expanding 401(k) access to alternative assets like private equity. The move is seen as opening a $12 trillion market, with firms emphasizing the potential for target-date funds and new products such as evergreen funds and ETFs with liquidity features. In the beverage sector, private equity investors including Butterfly Equity, Brynwood Partners, and Gryphon Investors are actively pursuing deals, with examples like Azalea Capital's investment in Pickle Juice and Boyne Capital's investment in Blue Monkey Beverages. Additionally, KKR has recapitalized DentalXChange, a U.S. dental revenue cycle management company, to expand employee equity ownership. The first half of 2025 saw 18 healthcare megadeals, down from 27 in the same period last year, including major transactions such as Sanofi’s $9.1 billion acquisition of Blueprint Medicines and GSK’s over $1 billion acquisition of IDRx.