Deutsche secondaries team spins out – exclusive

The unit has formed Glendower Capital, which focuses on private equity secondaries from London and New York, sister publication Secondaries Investor has learned.

Deutsche Bank Asset Management‘s entire secondaries team is spinning out into a new firm, sister publication Secondaries Investor has learned.

The firm is Glendower Capital, according to filings with the UK’s Companies House, and counts among its employees senior executives of the German bank’s DB Private Equity unit.

Glendower has a 17-member team and is a “privately held investment firm focusing on secondary private markets with a flexible and opportunistic investment approach”, according to its website.

The firm operates from New York and London and identifies private equity secondaries opportunities with “asymmetric risk/reward profiles, offering enhanced downside protection and meaningful upside optionality”, the website notes.

The filings list at least four of Glendower’s partners as:

  • Carlo Pirzio-Biroli, DB Private Equity’s managing director and global co-head of secondary opportunities funds; 
  • Charles Smith, managing director and the other global co-head of secondary opportunities funds in the unit; 
  • Chi Cheung, managing director and head of Europe secondaries in the unit; 
  • Deirdre Davies, a director in the unit. 

According to an investor source, Deutsche is “entering into an advisory agreement with Glendower Capital to provide continuous portfolio management to the secondaries opportunities programme of approximately $3 billion”.

The spin-out will be effective from August and Glendower is 100 percent owned by five partners from Deutsche, the source added.

The move comes at the same time as two high-profile departures from DB Private Equity. In mid-July, Neuberger Berman announced it had hired Scott Koenig in New York to launch its real estate secondaries strategy. Koenig had been at Deutsche for 16 years and founded its real estate secondaries business.

In June, Jason Sambanju, Deutsche’s Asia secondaries head, departed after three years in the role, as Secondaries Investor reported. Sambanju left Deutsche to launch Foundation Private Equity, a Singapore-based firm focused on investing in secondaries in Asian private equity.

DB Private Equity is investing its third secondaries vehicle, the 2014-vintage DB Secondary Opportunities Fund III, which closed on $1.7 billion. The unit has been active in fund restructurings over the past 12 months, including a transaction involving healthcare-focused Enhanced Equity Funds’ 2005- and 2010-vintage vehicles, the restructuring of Swiss investor Zurmont Madison’s 2007-vintage vehicle, and the restructuring of GMT Partners II, a 2006-vintage buyout fund.

Limited partners in SOF III include Kentucky Retirement Systems, with a $100 million commitment, and Austin Firefighters’ Relief and Retirement System Public Pension Fund, with $10 million, according to PEI data.

Deutsche is no stranger to spinouts. In February 2016 the bank teamed up with Goldman Sachs Asset Management to buy the National Bank of Greece’s private equity holdings, finalising the spin-out of NBG’s private equity unit. NBGI, which invests in venture, growth capital, buyout and real estate funds in Europe and North America, continued to manage the funds and rebranded to Stage Capital last October. Deutsche Bank declined to comment.

Adam Le, Rod James and Marine Cole contributed to this report.