No hurdle, no problem
Advent International has set a $20 billion hard-cap for its ninth fund. The firm once again has not set a preferred return hurdle for the vehicle, but that’s no problem for New Mexico State Investment Council, which has committed $100 million, its first to the manager. Advent will also increase its investment team headcount to help “find diamonds in the rough”, MD Robert Weaver said at New Mexico SIC’s meeting on Tuesday.
Jaws hit floors Tuesday on the news that Japan’s Norinchukin Bank is to sell up to $5 billion of private equity stakes. The portfolio, which would, by some distance, be the largest ever shopped on the secondaries market, contains 35 fund stakes, 75 percent of which is unfunded, giving the deal the flavour of a big de-risking exercise. It is being shown to a select group of buyers, Secondaries Investor reported. The Tokyo-headquartered co-operative bank has offloaded large portfolios before to buyers, including Lexington Partners, just six weeks ago, and Blackstone Strategic Partners, in August 2017. Expect them to be in the frame again.
China Investment Corporation has tapped Eurazeo to manage a fund of up to €1 billion that will target French and European businesses hoping to expand into China. Eurazeo, BNP Paribas and other third parties will also invest in the fund.
CIC is fast becoming a familiar face overseas. The $940 billion sovereign wealth fund backed a $1.8 billion Japan industrial fund in October, set up the €150 million Ireland Strategic Investment Fund last March and launched the $5 billion China-US Industrial Cooperation Fund alongside Goldman Sachs the previous year.
At the same time, Germany, France and the US, among others, have grown increasingly wary of Chinese investment. Chinese FDI into North America and Europe in 2018 fell 73 percent to a six-year low of $30 billion last year, according to Baker McKenzie.
Ares’ second look at a GFC-era fund. Ares Management is the latest big-name GP to tap the burgeoning secondaries market. The listed firm has been exploring a restructuring of its crisis-era private equity fund that holds struggling luxury department chain Neiman Marcus, Secondaries Investor reports. The news comes a day after the retailer announced it had reached a loan extension agreement with creditors for almost $5 billion in debt.
Nordic’s new blood. Nordic Capital, a stalwart of European private equity, has a new head of capital markets. Christof Ratjen has taken over the post from Mark Bulmer, an 11-year veteran of the firm who was a partner in Nordic’s investor relations team. No word on where London-based Bulmer will turn up next, and a spokeswoman for the firm says he left to pursue other opportunities.
Landlord troubles. Blackstone is coming under fire from the United Nations, which accuses the firm of exacerbating the housing affordability crisis, according to The Guardian. In a series of letters to Blackstone and government officials in the US and Europe, the UN housing advisor accuses the asset management giant of inflating rents and overcharging for ordinary housing repairs, effectively pricing out low- and middle-income tenants. The letters also accuse countries of not regulating corporate landlords enough to protect ordinary tenants that need housing. Blackstone has disputed the claims.
PEI news editor Adam Le and senior reporter Carmela Mendoza are in Geneva today and tomorrow for industry body Invest Europe’s Investors’ Forum. They’d love to catch up with you over a coffee and chocolate – get in touch: firstname.lastname@example.org and email@example.com.
Want more data? There are more than 6,700 institutions in our database, including Nordic Capital, China Investment Corporation, Ares, Eurazeo and Norinchukin Bank from today’s Side Letter.
He said it
“We compete with a lot of people. We win sometimes, we lose sometimes. We lose deals we wish we had won.”
Advent International’s Robert Weaver talks to New Mexico State Investment Council about market competition.
Today’s letter was prepared by Toby Mitchenall, Isobel Markham, Adam Le, Rod James, Alex Lynn, Lisa Fu and Preeti Singh.
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