A key trade group is out with best practices for private equity firms that want to turn to NAV-based loans for early liquidity amid a dearth of exit opportunities.

Why it matters: PE firms are getting creative and increasingly turning to these credit facilities, which help them return money to limited partners or provide additional support to portfolio companies, as exits remain challenging.

• The flip side: They add even more leverage to structures that are often already highly levered.

State of play: The Institutional Limited Partners Association, which issued the guidelines, emphasizes it doesn't want to dictate when and how a PE firm should use a NAV facility — but it does want to encourage best practices around how general partners and limited partners discuss those decisions.

• Its new report includes guidelines on when and how GPs should discuss these loans with their limited partners (hint: before they get one), lists of questions they should prepare answers to, and suggested legal language for future fund agreements.

Zoom in: "[NAV loans are] a piece of leverage that increases the risk of the investment," Brian Hoehn, ILPA director of industry affairs, tells Axios about the importance for GPs to be transparent with LPs.

• There are also associated costs that come with these loans, which can ultimately impact returns.

Between the lines: PE limited partnership agreements tend to be silent on NAV loans. This has led some GPs and their lawyers to interpret this to mean they don't need have approval from limited partners to set them up, says Hoehn.

• But that's left their investors feeling blindsided and in the dark about what's going on.

Zoom out: The SEC is scrutinizing the use of the NAV loans and other fund finance instruments, according to an official's comments in May.

• The agency is looking for conflicts of interest, said Dan Faigus, SEC private funds unit senior specialized examiner, at an event, per Private Funds CFO. "Are LPACs being engaged, should they be engaged, does [a fee or expense] comply with the fund documents? We still see conflicts in this. There aren't theoretical risks. It is something to be mindful on the portfolio construction side," he said.

The bottom line: Where there's a trend, expect questions from those holding the purse strings and regulators.

KKR, with participation from Dragoneer, will acquire Instructure Holdings (NYSE: INST) for $4.8 billion, or $23.60 per share, in an all-cash transaction including Thoma Bravo's stake.

Why it's the BFD: It's another chapter in Instructure's journey in and out of the public market. Thoma Bravo took the company private in 2020, and listed it back on the stock market a year later.

Zoom in: The price is at a 16% premium of Instructure's May 17 stock price, when reports surfaced of a potential sale.

The bottom line: "A take-private of the company is the second involving an education software provider in quick succession. Bain Capital agreed in June to buy PowerSchool Holdings Inc. in a $5.6 billion deal." — Ryan Gould, Bloomberg

• Micropep, a French pesticide company, raised $429m in Series B funding led by Zebra Impact Ventures and BPI Green Tech Investment, with Fall Line Capital, FMC Ventures, and Sofinnova Partners also participating. axios.link/4cTFFpi

• Astranis, an SF geostationary satellite maker, raised $200m in Series D funding led by a16z and BAM Elevate, with Blackrock, Fidelity and Baillie Gifford also participating. axios.link/4cUJtqh

• Applied Intuition, a Mountain View, Calif., autonomous driving simulation software startup, raised $200m is secondary sale led by Fidelity. axios.link/4c0j0qd

🚑 Kestra Medical Technologies, a Kirkland, Wash., cardiac arrest monitoring company, raised $196m in funding led by Andera Partners, Ally Bridge Group, Longitude Capital, and Omega Funds, with T. Rowe Price, Eventide Asset Management, and Gilmartin Capital also participating. axios.link/3yc5XEi

• IntelePeer, a Dania Beach, Fla., customer service automation company, raised $140m in funding and debt financing led by Savant Growth and VantagePoint Capital Partners, with Coller Capital, Hollyport Capital, Manulife Investment Management and Achmea also participating. Vector Capital led the debt financing. intelepeer.ai

• Cowbell, a Pleasanton, Calif. provider of cyber insurance for small and medium-sized enterprises, raised $60m in Series C funding from Zurich Insurance Group. cowbell.insure

• Payt, a Dutch invoice and payments management software maker, raised $59.7 in funding led by Partech was the deal lead. axios.link/4dAKqnV

• InnerPlant, a Davis, Calif. crop monitoring tech company, raised $30m in Series B funding round led by Coutts Agro, with Systemiq Capital, Deere & Company and Bison Ventures also participating. innerplant.com

• Archera, a Seattle cloud cost management startup, raised $17m in Series B funding led by HighSage Ventures, with Ridge Ventures, Amplify Partners, and PSL Ventures also participating. axios.link/3WEGVam

• Bunch, a Berlin private investment management software maker, raised $15.5m in Series A funding led by FinTech Collective. axios.link/4cYnNJU

• DocketAI, an AI startup transforming revenue enablement, today announced a $15M Series A led by Mayfield and Foundation Capital. docketai.com

• Fractile, a U.K. AI chip company, raised $15m (£12m) in seed funding led by Kindred Capital, NATO Innovation Fund, and Oxford Science Enterprises, with Cocoa, Inovia Capital, Hermann Hauser, Stan Boland, and Amar Shah also participating. fractile.ai

• ZeroTier, an Irvine, Calif. network security startup, raised $13.5m in Series A funding led by Battery Ventures, with Bonfire Ventures, Anorak Ventures, Grand Enterprises B.V., Airbridge Equity Partners and First In Ventures also participating. axios.link/3yhVEyv

• Powder, a Los Altos, Calif., wealth and investment management software startup, raised $5m in seed funding from Y Combinator, General Catalyst, Funder's Club, Elefund, and Litquidity Ventures. axios.link/3SnEhDc

• Grazzy, an Austin-based hospitality industry digital payments company, raised $4m in seed funding led by Next Coast Ventures, with AZ-VC, InRevenue Capital, Iron Skillet Partners, and Tuesday Capital also participating. grazzy.com

• Lumi, a Las Vegas creator software startup founded by Colin Kaepernick, raised $4m in seed funding led by Seven Seven Six, with Kapor Capital and Impellent Ventures, Mariam Naficy, David Sze, Chamillionaire, and others also participating. axios.link/3ylPA80

• Look North World, an L.A. game studio and publisher, raised $2.25m in additional seed funding led by London Venture Partners, with Bandai Namco Entertainment 021 Fund, Overwolf, Crush Ventures, Hasbro, PixCapital, and Hibbard Road Partners also participating. looknorth.world

• American Industrial Partners acquired the grain & protein division of AGCO Corporation (NYSE: AGCO), which designs, manufactures, and globally markets grain storage and seed processing equipment. agcocorp.com

• Apollo will acquire International Game Technology (NYSE: IGT) and Everi Holdings (NYSE: EVRI) in an all-cash transaction that values the acquired businesses at approximately $6.3b. apollo.com

• FreshEdge, backed by Wind Point Partners, acquired Frontier Produce, an Indianapolis fresh produce distributor. freshedgefoods.com

• HGGC completed the sale of Marmic Fire & Safety, a Joplin, Mo., fire protection equipment inspection and maintenance specialist, to KKR. marmicfire.com

• Morgan Stanley Capital Partners acquired American Restoration, an Irving, Texas, provider of residential and commercial property mitigation and restoration services, from Soundcore Capital Partners. amrestoration.com

• TSG Consumer Partners invested in Summer Fridays, an L.A. beauty company, with Prelude Growth Partners exiting as part of the deal. axios.link/3WDuqeX

🚑 Mankind Pharma (NSE: MANKIND) agreed to acquire Bharat Serums and Vaccines in a deal valued at around 136.30b rupees ($1.63b) including debt from Advent International. axios.link/3Yl8Zkb

🚑 Behavioral Framework acquired Behavior Consultation & Psychological Services, a Greenville, N.C., provider of clinic, home, and school-based ABA therapy and autism diagnostic services. bcps-autism.com

• Narya, the Cincinnati venture firm co-founded by Sen. JD Vance, is extending its second fund's fundraising, per the WSJ. axios.link/4c0b9sJ

• Ellie Rubenstein has resigned as trustee from the Alaska Permanent Fund. axios.link/4fndZLo

• Integra Global Advisors, a Stamford, Conn., multi-family office, promoted Evan Finkel to head of venture capital investments and research. integraga.com

• Three Hills hired Tim Spillane as operating partner in London, Dan Knight as investment director in London, and Patrick Judd as associate in New York. threehills.com

• Warburg Pincus named Andrew Sibbald sole head of Europe and René Obermann as chairman of the region, per Reuters. axios.link/3Yf9D2F

The narrative of the stock market over the past couple of weeks is clear: Magnificent Seven are imploding, while small caps are on a tear. The big picture, however, remains unchanged, notes my colleague Felix Salmon.

Why it matters: The so-called Great Rotation is the phenomenon whereby megacap tech stocks are sold with the proceeds plowed into small caps.

Follow the money: In just five trading sessions after July 9, the Russell 2000 index of smaller companies spiked by more than 11%. Meanwhile, the S&P 500 information technology sector has sunk by 8% since then.

The bottom line: Small-cap stocks still trade significantly below their 2021 highs. If they're doing well right now, it's from a weak base.