Amsterdam’s financial district somehow has a relaxed feel to it. With its handful of tall glass buildings, the city’s Zuidas (as it’s called in Holland) tries its hardest to look like London’s Canary Wharf. But it remains unmistakably Dutch, thanks to its small scale and the sheer volume of chaotically parked bicycles nearby.
Inside AlpInvest’s low-profile headquarters – where Private Equity International has to come to meet Volkert Doeksen, the firm’s chairman of the board and managing director, and Wouter Moerel, its head of secondary investments – the atmosphere is similarly relaxed. It’s a reflection, perhaps, of the Dutch poldermodel, the consensual negotiating culture on which the Netherlands prides itself. And no wonder: for the decade between 2001 and 2011, this Dutch group invested more or less exclusively on behalf of Dutch pensioners in two Dutch pension funds, APG and PGGM.
However, over time, as the pension fund market started to become more competitive, APG and PGGM were keen to differentiate themselves from each other – and having an identical private equity offering didn’t really chime with that. So in 2011, the two groups decided to put AlpInvest up for sale, with a view to building up their own private equity activities instead. After a competitive process run by Credit Suisse, their stakes were ultimately bought by US alternatives giant The Carlyle Group, which initially took a 60 percent stake and then hoovered up the remaining 40 percent last year.
LIFE UNDER CARLYLE
AlpInvest had a big say in its own destiny during the sale process, Doeksen tells PEI. “Both PGGM and APG realised it was important that the AlpInvest team would have to endorse the new owner.” Since AlpInvest continues to manage in excess of €30 billion for the two funds, they’d have been crazy not to.
Carlyle wasn’t the only firm keen on acquiring AlpInvest, according to Doeksen; apparently the sale attracted a lot of interest both from asset managers looking to get into private equity and some of Carlyle’s competitors. But the team preferred Carlyle because of its “amazing global reach and unique skill in fundraising”, he says. “If you look at the Carlyle set-up, they [have] probably raised more money than anyone in the private equity industry.”
Was there no culture clash between the laid-back Dutch and the gung-ho Americans? “We’re not that Dutch,” he smiles. “We have more investment professionals in the US than in the Netherlands, and that was already the case prior to the Carlyle acquisition. We do not consider ourselves as a Dutch organisation – we see ourselves as a global firm.”
AlpInvest sits within Carlyle’s (much more interesting than it sounds) Solutions Group, which the US-based group has been building up in recent years. In February this year, it completed the acquisition of Diversified Global Asset Management Corporation (DGAM), a hedge fund manager with more than $6.7 billion of assets under management. Last year, it also bought Metropolitan Real Estate Equity Management, a global real estate multi-manager with $2.6 billion in capital commitments. With AlpInvest, DGAM, and Metropolitan, Carlyle’s solutions segment had $57.3 billion of assets under management as of September 30, 2013.
The idea is that the platform (led by Jacques Chappuis, who only joined Carlyle last year), will offer smaller investors tailored accounts that allow them to access different strategies. Since these investors would not typically invest directly in a Carlyle fund – on the grounds of scale – the Solutions Group is not likely to be in competition with other parts of the Carlyle platform, the firm suggests. Equally, larger LPs who do invest directly in the big funds may outsource a particular aspect of their strategy – emerging markets, perhaps – to the Solutions Group, and retain control of everything else.