AlpInvest shelves fund of firms fundraising – exclusive

The firm has decided not to continue capital raising for its fund focused on acquiring stakes in private equity GPs, PEI has learned.

AlpInvest Partners has pulled its fundraising process for acquiring stakes in other private equity firms, Private Equity International has learned.

While the “partnership” fund team will not be officially disbanded, the Amsterdam-headquartered firm is not raising a dedicated pool of capital for the strategy, according to a source with knowledge of the situation.

Joe Lombardo, a vice-president and sole remaining member of the partnership team, left the firm in recent weeks, it is understood. He no longer appears on AlpInvest’s website.

This follows the departure in October of partner Sean Gallary, who was hired to lead the strategy in early 2017. It is understood the firm was seeking around $1.5 billion to invest in the management companies of general partners.

It is not clear whether the decision to cease fundraising was made before or after the departures.

The fund of firms market has been growing in recent years. In February, Petershill Private Equity, a fund managed by Goldman Sachs Asset Management, held its final close on $2.5 billion. In April, PEI reported that Neuberger Berman’s Dyal Capital Partners had held a second close on $4.9 billion and would aim to close its fourth GP stake fund by the end of June.

Institutional investors are hungry for the strategy, according to Jeff Hammer, managing director at advisor Houlihan Lokey and co-head of the firm’s illiquid financial assets practice.

“The predictability of the income stream from funds with long-term, locked-up money presents an attractive investment opportunity,” Hammer told sister publication Private Debt Investor in September.

Amsterdam-headquartered AlpInvest Partners has $39 billion in assets across its primary, secondaries and co-investment businesses.

The firm declined to comment.