Side Letter: 2020 fundraising, Neuberger’s Walker talks D&I

A wave of mega-funds bolstered 2020's fundraising total. Plus: Neuberger chairman George Walker says labour rights, D&I will top US investors' ESG concerns this year and ILPA has launched a model NDA. Here's today's brief, for our valued subscribers only.

He said it

“There’s not a day that goes by that I don’t get a call from somebody telling me they’ve got a SPAC or a banker who’s got a client keen to buy something.”

Partners Group co-chief David Layton tells Private Equity International the proliferation of special purpose acquisition companies is set to continue.

Just happened

PE’s second wave
Private equity fundraising remained robust last year thanks to a wave of secondaries mega-funds. Funds closed on at least $535.2 billion in 2020, the third-highest total since 2015, according to preliminary data from PEI’s upcoming Fundraising Report 2020. Private equity secondaries fundraising more than doubled year-on-year to nearly $80 billion. Four of the 10-largest funds closed were dedicated to the strategy, including vehicles raised by ArdianLexington Partners and Goldman Sachs Asset Management.

The number of PE funds closed slid to its lowest level over the past five years at 906, as travel bans and market uncertainty prompted a flight to familiarity.

Causes for concern
US investors will have an “enormous focus” on the treatment of workers and diversity and inclusion in the coming year, according to Neuberger Berman’s chief executive and chairman, George Walker. Speaking at the virtual Asian Financial Forum on Monday, Walker told delegates that an audience survey of the biggest ESG concerns for companies in 2021 may have yielded different results if only US respondents were surveyed. Although climate change and carbon-related issues topped the list with 51 percent of the vote, Walker said those in the US would likely have pointed to labour rights and DE&I due to the coronavirus and the country’s social justice issues last year.


ILPA’s model NDA
The Institutional Limited Partners Association has released a model non-disclosure agreement to streamline due diligence for LPs and GPs. The document aims to make legal negotiations more efficient, while cutting costs and the uncertainty of negotiation, ILPA chief Steve Nelson said in a statement. It also addresses the issue of what constitutes confidential information by treating everything shared by a manager as such, with the exception of information that is or becomes generally public or that is already in possession of a signatory before the effective date of the NDA.

New Mountain’s capital
New Mountain Capital held two final closes in 2020. The New York-headquartered firm raised $9.6 billion for New Mountain Partners VI – a 55 percent step up from its 2017-vintage predecessor – and $640 million for Strategic Equity Fund I, its debut non-control vehicle, per a statement. It also deployed $2.6 billion last year and generated $5.4 billion of total gross cash returned or in contract. The firm’s minority fund was first reported by PEI in 2018.

Dig deeper

LP meetings. It’s Monday, so here are some LP meetings to watch out for this week.

19 January

20 January

21 January

22 January

Today’s letter was prepared by Alex Lynn with Carmela Mendoza.

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