The secondaries veterans at Paul Capital expect to capitalise on the emerging markets boom gripping private equity GPs and LPs alike.
Last month, the New York-based firm closed its ninth and largest private equity secondaries fund on $1.65 billion (€1 billion), in excess of its initial $1.25 billion target and $1.5 billion hard cap.
In contrast to previous funds, Fund IX will have a larger allocation to the emerging markets, up to 20 percent.
A $400 million transaction in Eastern Europe is currently being considered, as part of which Paul Capital would offer a co-investment opportunity to its investors, according to partner David de Weese. Paul Capital expects to offer a substantial amount of co-investment opportunities on the vehicle's larger transactions worldwide.
The firm has become increasingly global, adding offices in São Paulo and Hong Kong last year to its existing offices in New York, San Francisco, London, Paris and Toronto. Paul Capital was also the first secondaries firm to open an office in Latin America, says de Weese.
Secondary transactions have become an ever more accepted tool for managing portfolios, he adds.
“Increasingly, banks, insurance companies, pension funds, family offices, and other holders of private equity are turning to us to help them trim their portfolios and manage risk exposure and liquidity,” de Weese says.
He expects the firm's most recent fund's capital to be deployed in approximately three years. It will seek diversification in terms of strategy, industry, geography and vintage.
The fund's investors include endowments, public and corporate pensions, sovereign wealth funds and family offices. More than 50 percent of commitments were from public and corporate pension plans, with the majority of LPs being repeat investors.
Paul Capital manages $6.6 billion in capital commitments across three investment platforms including private equity secondaries, healthcare royalty and revenue interests and venture capital funds of funds. More than $4.2 billion is dedicated to the secondary private equity market.
ADVENT CLOSES ON €6.6BN
Global mid-market buyout firm Advent International has raised a €6.6 billion ($10.4 billion) fund, exceeding its target of €5 billion. Advent held its first close on €5.5 billion in March this year having set out on the fundraising trail in November. Advent had interest from investors representing more than €10 billion of capital, but the fund was scaled back, with existing limited partners given priority. The fund size was restricted because the firm believed it would be difficult to invest a larger amount in the mid-market in present market conditions. It is targeting investments with enterprise values of €200 million to €1 billion with the ability to do larger deals. The fund is expected to make 30 to 35 investments.
BRITISH COLUMBIA LAUNCHES $90M VENTURE FOF
The Canadian province of British Columbia has launched BC Renaissance Capital Fund, a $90 million (€57 million) venture capital fund of funds. Its purpose is to develop anchor companies in the region and attract additional private venture capital and market expertise. Already fully committed, the fund of funds is a limited partner with US early-stage technology investor Arch Venture Partners; Ontario-based seed stage technology venture firm Celtic House Venture Partners; San Francisco-headquartered healthcare products investor Kearny Venture Partners; Silicon Valleybased technology venture firm VantagePoint Venture Partners; Vancouver's early-stage technology investor Ventures West Management; and San Franciscobased Walden Venture Capital.
ANGELO GORDON FILES FOR $300M SPAC
Alternative asset manager Angelo Gordon has registered plans with the Securities and Exchange Commission to raise $300 million (€189 million) through the initial public offering of special purpose acquisition corporation (SPAC) Angelo Gordon Acquisition Company. The offering will be underwritten by JPMorgan. Formed by Angelo Gordon funds, the SPAC will acquire one or more operating businesses. It intends to sell 30 million units, consisting of one share of common stock and three-quarters of one warrant, priced at $10 each. Angelo Gordon is also raising $700 million for AG Private Equity Partners IV, an additional $200 million for a “reserve fund” and its sixth distressed investment fund which hit a $2 billion hard cap in March, according to a Dow Jones report.
CLEARVIEW CLOSES FIRST INSTITUTIONAL FUND ON $250M
Clearview Capital has closed its second fund on its $250 million (€158 million) hard cap after exceeding its initial target by $50 million. Clearview Capital Fund II is the Connecticutbased firm's first vehicle raised with commitments from institutional investors, which included Credit Suisse, RCP Advisors, New York Life, Equity Partners and 747 Capital. Clearview's first fund, which closed on $70 million, was raised exclusively from individuals and high-net worth family backers. The firm's second fund held its first close in October 2006 and is already between 15 and 20 percent invested. Fund II has invested in three platform companies and made three add-on acquisitions.
MORGAN STANLEY REAL ESTATE TARGETS $10BN
Morgan Stanley Real Estate is on the road with a distressed real estate opportunities fund targeting $10 billion (€6.4 billion). The fund, called Morgan Stanley Real Estate Fund VII Global, will make global distressed investments as well as target development opportunities in the emerging markets. Typical investments will be between $20 million and $1 billion, according to meeting minutes from the Pennsylvania Public School Employees' Retirement System which approved a commitment of up to $400 million. MSREF VII will invest in the distressed real estate debt and equity of large corporations and government entities, as well as scout deals in China, India and other emerging markets.
KLEINER PERKINS TO DEPLOY $1.2BN
Kleiner Perkins Caufield & Byers has launched two new funds: its $700 million (€455 million) KPCB XIII fund and a $500 million green growth fund. The firm's thirteenth primary venture fund intends to deploy its capital over a three-year period, largely backing early-stage ventures in the greentech, information technology and life science areas. Kleiner Perkins is positioning its green growth fund as an extension of its past greentech efforts, historically focussed on start-ups. The fund will target companies already in their growth stage with the goal of speeding “mass market adoption of solutions to the world's climate crisis”, according to the firm. The venture and growth teams will work closely, capitalising on synergies between the two.
GIP CLOSES $5.6BN INFRASTRUCTURE FUND
Global Infrastructure Partners has completed fundraising for its flagship first fund, with total commitments of $5.64 billion (€3.65 billion). The fund has already made several investments, including the acquisition of London City Airport in December 2006. The fund has also invested in port assets in the UK and Argentina, and in a liquid petroleum product storage facility in India. Headquartered in Connecticut with offices in New York, Hong Kong and London, GIP is planning to use its fund to invest in infrastructure assets worldwide, in both OECD and select emerging market countries. Credit Suisse and General Electric were the joint founding investors in GIP, with each committing $500 million of investment capital.
SUMERU CLOSES DEBUT FUND ON $1.1BN
Silver Lake Sumeru, headed by Ajay Shah, has closed its inaugural fund on $1.1 billion (€712 million), surpassing its $750 million target after roughly 11 months in the market. Like its mega-buyout parent Silver Lake Partners, Sumeru targets growing technology and technology-enabled companies in the hardware, software, internet and technology oriented services sectors. Sumeru raised the fund without the help of a placement agent and shares a number of limited partners with Silver Lake Partners' funds and Sumeru predecessor Shah Capital. Sumeru was brought under Silver Lake's umbrella in December 2006, when the Silicon Valley buyout firm absorbed Shah. The Sumeru fund will make approximately 12 to 15 investments between $50 million and $150 million on average.