Petershill Partners, the London-listed GP stakes entity operated by Goldman Sachs Asset Management, will not rule out making Asia-Pacific acquisitions to diversify its US-heavy portfolio.
The company made five GP investments worth $458 million in the fourth quarter of 2021, all of which were North American private equity firms, according to its maiden full-year earnings on Wednesday. These included a $230 million investment into healthcare and industrials firm Arsenal Capital Partners and $97 million into mid-market firm Arlington Capital Partners.
North America accounted for 89 percent of Petershill’s invested capital as of 31 December, with the remainder in Europe, per the earnings.
“Over time, we will add additional geographic diversification,” managing director and co-head Robert Hamilton Kelly told Private Equity International. “We have been active in Europe; we’re starting to see activity in Asia as well. But clearly North America is going to represent one of the biggest markets for us, given… the depth of the private capital markets there.”
Asia-Pacific has seen a number of notable GP investments and M&A processes this year: North Asian giant MBK Partners reportedly sold a $1 billion stake to Blue Owl Capital in January, and Baring Private Equity Asia sold itself to EQT last month.
“We look at Asian opportunities, we look at European opportunities, but it’s more a case of making sure that it’s the right firm and that the capital we provide them helps accelerate their development and we can be a value-added partner,” managing director and co-head Ali Raissi-Dehkordy said. “So we’re excited about some of the opportunities we see in Asia, but also don’t feel particularly compelled to have to transact rather than focusing on transacting with quality as we did in Q4.”
Petershill’s portfolio AUM rose 15 percent in the fourth quarter to $234 billion across 23 GPs. The firm expects its portfolio GPs to raise $40 billion to $45 billion of fee-paying assets this year – more than double the $21 billion raised last year – and it will seek three to six new acquisitions of between $100 million and $300 million.
“It’s a nuanced fundraising environment and we think the highest quality firms with the strongest pricing power and demonstrated ability to generate returns for investors… are the ones who are succeeding and those are the ones who are raising capital strongly,” Raissi-Dehkordy said. “You’re not necessarily going to see that across the board.”
The vehicle’s 200 underlying funds have a weighted average capital duration of 8.1 years as of December, the result noted.
“We’re seeing extension of duration, so capital being held for longer, whether through longer duration funds, whether through continuation vehicles, whether through assets being sold from one PE firm to another,” Raissi-Dehkordy added. “You’re seeing an increase in private capital – I think our firms are benefiting from that.”
Petershill Partners was listed in September as a portfolio of 19 stakes owned by GSAM’s Petershill unit, representing $187 billion of assets under management across the likes of Accel-KKR, Clearlake Capital and Francisco Partners. The non-listed Petershill unit raised $5 billion for Petershill IV in January, PEI reported at the time.
The story has been updated to show that Robert Hamilton Kelly and Ali Raissi-Dehkordy are co-heads of Petershill Partners.