Lincoln International aims for new segment in private fund advisory

Lincoln International, one of the US’s biggest investment banks, wants to redefine the role of the private funds adviser with its latest pair of hires.

The Chicago-headquartered investment bank this month brought in former UBS private funds co-heads Steve Carre and Dan Posternak to launch a private funds advisory business. They joined the firm as managing directors in New York.

Rather than focus on any one aspect of the market, the newly formed private funds advisory business will aim to provide full-spectrum services and advice, Carre and Posternak told Private Equity International.

Carre and Posternak have a formal background in primary fund formation, with a particular emphasis on first-time fundraises. Their track record includes SK Capital Partners, Kinderhook Industries, Staple Street Capital, LightBay Capital, Varsity Healthcare Partners, and others.

They consider themselves creative fundraisers whose transaction log includes working on continuation funds and single-asset vehicles. Several of their clients during their decade-plus tenure at UBS banked with Lincoln, enabling the pair to develop a strong relationship with the firm.

Their approach to the fund advisory business centres on the GP. The pair are not going in with any “pre-programmed ideas” about how to work together or sell a particular transaction, Carre told PEI – rather, they want to understand the strengths, objectives and weaknesses of the firm so they can provide long-term service in the context of a relationship.

The pair hope to be the bilateral relationship for everything a GP could need, ranging from debt capital markets to advice on non-transactional matters such as governance, leveraging the more than 700 professional Lincoln team.

The group will look to have 10 to 15 multi-decade relationships with private investment firms, according to Carre. “And in that period of time, the Lincoln team, not just PFA, but Lincoln broadly, will help and partner with private equity firms on the full spectrum of strategic and capital objectives.”

The team will look to staff up to about 15 professionals to begin with, and will not pigeonhole them into niches such as primaries or secondaries, he added.

From Lincoln’s perspective, the move completes the investment bank’s capability to service the entire timeline of a private fund’s life, from fundraising, all the way to finding liquidity, in the M&A or secondaries market, according to chief executive Rob Brown. The pair strongly resonated with Lincoln’s culture of being “advisers, not transaction executors”, added Brown.

Lincoln’s move is the latest in investment banks and placement agents wanting to take advantage of an evolving fund environment. Firms including Rothschild, Goldman Sachs and Jefferies have all added staff in the past 18 months to capitalise on GP clients’ desires to hold assets for longer or address liquidity issues among their LP bases.