PrivateEquityOnline spoke to Smith and Beaton and asked what prompted them to bring their offering under the umbrella of a bigger firm.
PEO: How did this link-up come about?
AB: We started Glenalta last year and since then have been building the base of the business. We got talking with Thomas [Kubr, Capital Dynamics chief executive], and Janusz [Heath, head of the London office], who we’d done business with previously at GE, and we talked about our plans for the co-investment business. Over time it became clear that our views and thoughts were very similar.
PEO: You’ve obviously been in discussions for some time – what made you decide to throw in your lot with Capital Dynamics?
AB: With the addition of their specialist expertise, and the sheer breadth of their activity, we felt that we could go from 0 to 60 much more quickly than we could as an independent entity. So after long discussions, we agreed to join.
PEO: What extra capabilities does it offer you?
DS: We’ve mostly been working with LP clients, who are more used to making primary fund commitments – one benefit of joining Capital Dynamics is their access to the underlying GPs.
PEO: Glenalta was European-focused – will the new offering look further afield?
DS: Our experience as a team and our track record has largely been in Europe. But joining Capital Dynamics gives us the chance to build a global business.
PEO: Why is Capital Dynamics only coming to co-investment now?
AB: The firm’s approach has always been to do something properly, or not at all. Its relationships have yielded co-investment opportunities in the past, which is why it wanted to put together a dedicated resource. But because it didn’t have the expertise in-house, it hasn’t previously got involved. Now, with a dedicated team, it can do it properly.
PEO: How will the offering be structured?
DS: We’ll operate through a mix of single client accounts and commingled funds.
PEO: What about Glenalta? Will you retain any involvement?
DS: Glenalta’s structure will remain unchanged and it will continue to manage its existing assets. But we’ll be spending the majority of our time with Capital Dynamics.