PEI Awards 2019: Secondaries winners

Presenting two new global categories of Preferred Equity and Direct Secondaries, plus winners across LP Sale and GP-led Deal of the Year, and more.

Preferred Equity Deal of the Year (global)

1. 17Capital

2. Landmark Partners

3. Investcorp

In January 2019, London-headquartered 17Capital completed the first ever preferred equity dividend recap, for a manager with close to €10 billion of committed capital across several European mid-market funds. The €275 million tranche, placed on a mature portfolio of buyout assets valued at €2 billion, allowed the manager to return liquidity to investors while maintaining exposure to a top-decile fund. It also opened the door to more fund-level dividend recaps which closed over the course of the year.

Direct Secondaries Deal of the Year (global)

1. HarbourVest Partners for Norwest Venture Partners, Avataar Venture Partners

2. Landmark Partners

3. HPE Growth Capital for WeTransfer

There was a landmark deal in the Indian secondaries market in the summer of 2019. HarbourVest Partners acquired a portfolio of six Indian growth assets from Norwest Venture Partners and used them to seed a fund. This vehicle is to be managed by newly formed venture capital firm Avataar Capital, led by former Norwest investment professional Mohan Kumar. The fund is $240 million in size, including follow-on capital to develop the portfolio. The deal took almost a year to complete.

LP Sale of the Year in Europe

1. Ardian, Strategic Partners, Evercore

2. Skandia Asset Management, Ardian, Greenhill

In early 2019, Ardian sold off large chunks of its secondaries vehicles to Strategic Partners in a deal understood to be worth as much as $2 billion. The sale included stakes in GPs such as 3i and Charterhouse Capital Partners, Private Equity International’s sister title Secondaries Investor reported at the time. This was the latest of several portfolios to change hands between Ardian and the Blackstone subsidiary. In 2017, Ardian sold around $800 million of interests at a 2 percent discount to net asset value, Secondaries Investor reported. It is understood Evercore advised on the deal.

GP-led Deal of the Year in Europe

1. AlpInvest Partners, Goldman Sachs Asset Management, HarbourVest Partners, Pantheon and Evercore for PAI Partners

2. Lexington Partners, Adams Street Partners, StepStone Group, Campbell Lutyens for Eurazeo

3. HarbourVest Partners, Hamilton Lane, Moelis for Bridgepoint

Heavily concentrated around a single, high-quality asset in the form of ice-cream maker Froneri, the €2 billion restructuring of PAI Europe V took three lead buyers committing €300 million each, and a total investor base of more than 40 to digest. It priced at a premium and produced a 7x return for departing investors. The deal was the best example yet of a GP using the secondaries market to hold on to a high-quality asset.

Secondaries Firm of the Year in Europe

1. Glendower Capital

2. Ardian

3. HarbourVest Partners

In August, Glendower Capital held a $2.7 billion final close on its first fund since spinning out of Deutsche Asset Management in July 2017. Glendower Capital Secondary Opportunities Fund IV closed above its $2.5 billion hard-cap, becoming one of the largest ever first-time private equity funds. The firm also executed on several high-profile deals, including a £300 million ($392 million; €361 million) single-asset restructuring centred around high-end department store Liberty, owned by London-based buyout firm BlueGem Capital.

Secondaries Law Firm of the Year in Europe

1. Kirkland & Ellis

2. Debevoise & Plimpton

3. Proskauer Rose

A multi-time winner of this award, Kirkland & Ellis had another big year in the European secondaries market. It advised on $10.87 billion of secondaries transactions in Europe in 2019, including nine GP-led deals for a combined $7 billion-plus, six portfolio sales with an aggregate value of $1.4 billion and two preferred equity deals worth more than $1 billion. Among the deals it worked on was the €955 million recapitalisation of Vitruvian Partners’ debut fund, a deal led by Lexington Partners.

Secondaries Advisor of the Year in Europe

1. Campbell Lutyens

2. Evercore

3. PJT Park Hill

In one of the closest-run competitions in the entire process, Campbell Lutyens emerged victorious in Europe, having also won the award in 2018. The firm’s European secondaries team advised on $6.5 billion of deals in 2019, including a strip sale used to seed Eurazeo Capital’s €700 million Fund IV and simultaneous GP-led processes on eight separate vehicles managed by Aberdeen Standard Investments with an aggregate net asset value of €750 million. Around half of LPs took up the offer, which demonstrated a new way for investors in smaller funds to gain liquidity at a good price.

LP Sale of the Year in the Americas

1. Manulife, AlpInvest Partners, Campbell Lutyens

2. PSP Investments, Ardian, Strategic Partners, Lazard

3. State Teachers Retirement System of Ohio, Evercore

In the third quarter, AlpInvest Partners underwrote the acquisition of an entire $1.7 billion portfolio off the balance sheet of Manulife before syndicating it to other investors. The deal, advised by Campbell Lutyens, priced at 100 percent of net asset value and comprised 50 high-quality US mid-market funds from managers such as Thoma Bravo, Apollo, Clayton, Dubilier & Rice and Audax. The result was a commingled fund for the Canadian insurance giant’s private equity team to manage.

GP-led Deal of the Year in the Americas

1. Goldman Sachs Asset Management, GIC, Adams Street Partners, Evercore for Accel-KKR

2. AlpInvest Partners, Lazard for Warburg Pincus

3. HarbourVest Partners, Credit Suisse for Corsair Infrastructure Partners

One of the most competitive GP-led processes of the year, the $1.4 billion GP-led deal on Accel KKR III centred on four top technology assets. On aggregate, they had grown eight-fold since their acquisition. The deal comprised $1.16 billion of new capital commitments and $225 million of follow-on investments. Rob Palumbo, managing director of Accel-KKR, said: “We are quite pleased with both the strong results of Fund III to this point, as well as the incremental $225 million of follow-on capital from this investor group that will allow us to further fuel these companies’ continued growth.”

Secondaries Firm of the Year in the Americas

1. HarbourVest Partners

2. AlpInvest Partners

3. Lexington Partners

HarbourVest Partners put a lot of capital to work in North America in 2019. It backed a $1.8 billion infrastructure GP-led restructuring involving fund manager Corsair; a tender offer on Court Square’s $3.2 billion Fund III; and gained the support of several big-name US LPs, including State of Michigan Retirement Systems and New Hampshire Retirement System, for its latest flagship fund. The fund, Dover Street X, is targeting $6.5 billion, nearly $2 billion more than what it raised for its 2015-vintage predecessor.

Secondaries Advisor of the Year in the Americas

1. Evercore

2. Lazard

3. Greenhill

For the second year in a row, Evercore clinches the title for best secondaries advisor in the Americas. The firm advised on around $18 billion worth of deals including multiple $1 billion-plus transactions and stapled tenders for US mid-market buyout firms. Standout deals include the winner of our award for best GP-led deal in the Americas, Accel-KKR’s $1.4 billion restructuring and TPG Growth’s tender offer on its 2011-vintage, $2.04 billion Fund II, led by Canada Pension Plan Investment Board.

Secondaries Law Firm of the Year in the Americas

1. Kirkland & Ellis

2. Ropes & Gray

3. Morgan, Lewis & Bockius

For the second consecutive year, Kirkland & Ellis picks up the award for best law firm of the year in the Americas. The firm did $34.66 billion worth of work in North America, including advising on 47 portfolio sales, 24 preferred equity investments, seven stapled tender offers and 24 GP-led fund restructurings. Among the deals it worked on are the $1.4 billion restructuring of Accel-KKR’s Fund III and two rare credit fund restructurings on vehicles managed by Bain Capital.

LP Sale of the Year in Asia

1. GIC, PJT Park Hill

2. QSuper, Campbell Lutyens

3. Norinchukin Bank, Ardian, Greenhill

In February, sister title Buyouts reported GIC was working with PJT Park Hill on a billion dollar-plus portfolio sale, one of several to emerge from Asia in 2019. GIC has been a perennial seller and key driver of volumes in Asia, having sold $2 billion of stakes to Goldman Sachs Asset Management in 2018. It has also proved particularly innovative, backing a landmark renminbi-to-dollar restructuring involving Chinese GP Loyal Valley.

GP-led Deal of the Year in Asia

1. Coller Capital, Campbell Lutyens for Baring Asia Private Equity

2. Lexington Partners, Lazard for TPG Capital

3. HarbourVest Partners for Norwest/Avataar

In November 2019, Secondaries Investor revealed that Baring Asia Private Equity was to run a single-asset transaction on its 2007-vintage, $1.52 billion Fund IV. Melbourne-based post-secondary education provider EduCo Global was lifted into a continuation fund backed by Coller Capital, giving the general partner more time to manage a top-performing asset.

Baring ranked 33rd in the PEI 300 ranking of the biggest fundraisers in private equity, making it the second-largest Asia-headquartered firm on the list.

Secondaries Firm of the Year in Asia

1. TR Capital

2. GIC

3. NewQuest Capital Partners

A multi-time winner of this award, TR Capital had a strong year for fundraising and dealmaking in 2019. The Hong Kong-based direct secondaries specialist launched its Fund IV, with a target of $300 million, and held a first close. It also closed five deals, including a renminbi-to-US dollar restructuring that allowed GP Kinzon Capital to open itself to foreign investors. The deal, advised by Lazard, involved seven assets and was worth around
$100 million including follow-on capital.

Secondaries Advisor of the Year in Asia

1. Campbell Lutyens

2. Lazard

3. Atlantic Pacific Capital

Campbell Lutyens takes two of the three regional advisory awards in 2019. The firm did $1.4 billion of deals for six clients in 2019, including Baring Private Equity’s award-winning single-asset restructuring and the sale of a $500 million LP commitment for an Australian superannuation fund.

It also worked on a GP-led process on Legend Capital’s crisis era Fund IV, a $200 million deal backed by Hamilton Lane. The transaction provided extra time and capital for a portfolio of 12 China-based assets.

Secondaries Law Firm of the Year in Asia

1. Kirkland & Ellis

2. Dechert

3. Proskauer Rose

Kirkland & Ellis completes a clean-sweep of the legal categories, having advised on $4.5 billion-worth of Asian secondaries deals in 2019. These included at least three portfolio sales, seven GP-led fund restructurings and the winner of our award for best direct secondaries deal.

Kirkland & Ellis advised HarbourVest Partners, which acquired a portfolio of six Indian growth assets from Norwest Venture Partners for newly formed Avataar Capital to manage. The new fund is $240 million in size, including follow-on capital.