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10 big things: An impact investor flunks out

The downfall of The Rise Fund’s founder joins a money management mega-merger and unicorn IPO news in our recap of the week.

This column’s primary focus if usually massive funds or nine-figure deals. There weren’t a ton of those this week. Which maybe is for the best—because even if 10 new unicorns had been created this week, it probably would have been overshadowed by the scandal of some of America’s glitziest citizens catching federal charges for bribing their kids’ way into college.

Here are the 10 things you need to know from the past week—including the bribery scandal’s connection to the worlds of PE and VC:

A college education is always expensive, but come on.

1. Admissions about admissions

It was a little more than two years ago that longtime TPG partner and TPG Growth founder Bill McGlashan teamed with Bono and several other investors to launch The Rise Fund, a $2 billion vehicle for making impact investments aimed at generating social good in addition to good returns. A New York Times story announcing the fund’s launch wrote that McGlashan “more resembles a Buddhist monk than a cigar-chomping banker in pinstripes.”

McGlashan’s appearance in the news this week wasn’t overly monk-like: He was one of at least 50 people charged by federal prosecutors in connection to a scheme to pay bribes and falsify test scores to get their kids into some of America’s most exclusive colleges, joining celebrities like Lori Loughlin (unfortunate behavior from Aunt Becky) and executives like Willkie Farr & Gallagher co-chairman Gordon Caplan on the ignoble list.

In McGlashan’s case, the federal charges outlined the investor’s alleged efforts to get his son into USC by paying a $50,000 bribe to alter ACT test results and pretending the teenager was a football recruit so he could face lower admissions standards. The so-ironic-it-hurts money quote from the charges, sourced to McGlashan: “The way the world works these days is unbelievable.”

To its credit, TPG almost immediately suspended McGlashan. Two days later, McGlashan resigned from TPG and the firm attempted to fire him, seemingly at almost the exact same time. Either way, the result is the same: McGlashan is gone from TPG, and one of the most prominent names in the burgeoning impact investing sector is now nursing a brutal black eye.

2. A pastoral purchase

The peaceful names of the participants belie the import of the deal: Brookfield Asset Management agreed this week to buy 62% of Oaktree Capital Management for $4.7 billion, creating an alternative investment giant with $475 billion in AUM in a move set to shake up the money-management world. Our analysts took a closer look at what it all might mean.

3. Uber gets ready

The ridehailing giant plans to publicly release its S-1 filing and begin its investor roadshow next month, per reports, which means a debut on the public markets is likely soon to follow. The potential $120 billion offering (which could also potentially be worth much less, too) is almost here. And Uber is reportedly preparing for the IPO in the most Uber way possible: by raising up to $1 billion in funding for its self-driving unit from the likes of SoftBank and Toyota.

4. Cloudflare … not so much

It was thought that Cloudflare, which provides security services that help websites safely operate, would be one of the many unicorns going public during 2019. But those plans may now be on hold after the company raised a $150 million round this week led by Franklin Templeton, a major private funding that would seem to make the public windfall of an IPO much less necessary. Valued at $1.8 billion in 2015, Cloudflare also counts Capital G, NEA and Venrock among its backers.

5. Other IPO ponderings

In general, the US IPO market seems to be warming back up after shutdown-induced frigidity. African ecommerce unicorn Jumia filed for an IPO on the NYSE this week, while the teeth-alignment pros at SmileDirectClub, last valued at $3.2 billion, are reportedly planning to file for a listing this summer. Alight, a maker of HR software backed by Blackstone, registered for an IPO on the NASDAQ that could raise as much as $800 million. And German biotech company BioNTech could reportedly raise a similar sum in a US offering late this year or in early 2020.

6. Chipping in

From Microsoft to Intel to AMD, it seemed like everybody wanted to buy Mellanox Technologies, a chipmaking company that specializes in hardware for data centers and supercomputers. But this week, it was Nvidia that emerged victorious, lining up an agreement to buy Mellanox for $6.9 billion. Investors in Nvidia, which makes chips for gaming and several other markets, certainly approved: After starting the week at just a bit over $150 per share, stock in Nvidia (NASDAQ: NVDA) closed Friday around $170 per share.

Mmm, chips

7. Social Capital alums move on

Two members of the recent exodus from Social Capital have found new homes. Mike Ghaffary, who was a general partner at the firm, has taken an offer to fill the same role at Canvas Ventures. It also came out this week that Sachin Sood, who was a VP of finance at Social Capital, was named the newest CFO at CRV. One impact of the once-red-hot Social Capital’s ongoing transformation has been an influx of talent in the job market.

8. Accel, a16z make moves

One of the most storied firms in Silicon Valley roped in reams of new cash this week, as Accel raised $525 million for its 14th flagship fund and $500 million more for its second Leaders Fund; the firm has also set a $1.5 billion target for its latest growth fund, per an SEC filing, with reports indicating it’s already well on its way to hitting that goal. Another icon of the VC world, Andreessen Horowitz, reportedly also unveiled major plans of its own in the form of a new office in San Francisco, an addition to its existing home on Sand Hill Road.

9. PE plays in Europe

In its second rugby-related move in recent months, CVC Capital Partners reportedly offered £500 million (about $662 million) this week for a stake in Six Nations, the operator of an international rugby union tournament played each year in Western Europe. Other PE executives, though, are trying to exit the space: Apollo Global Management co-founder Josh Harris and Blackstone’s David Blitzer are reportedly eyeing a sale of their existing stake in London’s Crystal Palace soccer club.

10. Flight-hailing

Yeah, that’s right. If ridehailing or bikesharing or electric scooters weren’t enough, a startup called BlackBird has a new option: A platform for linking potential passengers with commercial pilots ready to ferry them through the skies above California and the surrounding environs. This week, BlackBird reportedly raised a $10 million Series A led by NEA.

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