Morgan Stanley Investment Management has become the latest firm to acquire a GP stake after investing in Tikehau Capital Advisors, the main shareholder of listed French private equity manager Tikehau Capital.
The investment banking giant invested alongside TCA’s existing shareholders, who together provided equity commitments of €195 million as part of a €300 million share capital increase, according to a TCA statement.
Morgan Stanley participated through an investment vehicle of its $1.4 billion North Haven Tactical Value fund, the statement noted. It is understood to be the first such investment from the 2017-vintage vehicle, which targets long-term private markets investments across various asset classes.
FFP, which is the Peugeot family’s €4.1 billion investment arm, French insurer MACSF and Singapore’s Temasek also increased their ownership.
Founders and management reinvested to retain 60 percent of TCA’s share capital, down from 75.9 percent as of 31 December, per the statement. TCA owns 29.7 percent of listed Tikehau Capital’s voting rights and capital.
Tikehau Capital will use the money to assist its expansion into the US, co-founder Antoine Flamarion told Private Equity International. The firm opened a New York office last year as it looks to complete its first direct investment in North America.
“We brought Temasek in as a shareholder three years ago to help us expand into Asia and we believe that bringing a fund managed by Morgan Stanley on as a North American brand will help our expansion there,” Flamarion said.
Tikehau plans to hire additional staff in its New York office, he added.
The firm, which has already completed more than 10 US co-investments, is yet to invest independently.
The Paris-headquartered firm also has big plans for Asia: it is opening a Tokyo office and held a first close on its debut Asian private equity fund of funds earlier this year.
Tikehau had €2.8 billion of private equity assets under management as of 31 December, comprising €1.2 billion of third-party capital and €1.6 billion from its balance sheet, according to its 2018 annual results. It had €22 billion of AUM across all asset classes, with private debt the largest at €8.3 billion.
GP stakes are big business. Goldman Sachs has its Petershill business and Blackstone invests through its Strategic Capital funds. Neuberger Berman is among the industry’s largest buyers of private equity stakes through its Dyal Capital Partners unit, which is expected to raise more than $7 billion for its fourth vehicle this year.
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