Side Letter: Apollo IPO regrets, six firms making waves in the PEI 300, ESG’s standardisation snag

Blackstone topped the 2019 PEI 300 but six other firms from the list made headlines this year, and they're worth keeping your eyes on. Here’s today's brief, for our valued subscribers only.

Just happened

Impact investing panel (from left): Greg Shell, Bain; Kirk Hourdajian, TPG; Michele Giddens, Bridges Fund Management; Silva Dezelan, Robeco

Standardisation headache

Standardising ESG reporting is still a major pain point in the industry, according to panellists and delegates at PEI’s Responsible Investment Forum on Wednesday in London. The UN-supported Principles for Responsible Investment are a starting point, but there are also several metrics or frameworks set up by industry bodies, working groups and platforms – such as the IFC’s principles and GIIN’s IRIS+ – which are yet to be adopted industry-wide. Quality, consistency of coverage and frequency of data are also key issues, according to BlackRock’s global alts head.

More from day one:

  • The UN’s Sustainable Development Goals are adding another layer of diligence questions for LPs, leading to more confusion among GPs.
  • It’s not about firm size, how big your pockets are, or about having an ESG team; it’s all about mindset and culture – every deal-doer and decision-maker should be thinking about ESG, said panellists.
  • Optimists see more impact funds sitting alongside main funds, more collaboration across the industry and the democratisation of impact investing via technology.

Regrets? He’s got a few

Leon Black has some regrets about taking Apollo Global Management public. Per MarketWatch, in an onstage conversation with Carlyle’s David Rubenstein at the Bloomberg Invest Conference on Tuesday, Black said the public market “doesn’t understand creatures like us very well”, and that the firm’s stock trades at “half where we should be”. Apollo – which decided to convert to a C-corporation last month – listed in 2011.

Return of the CHAMP

Australia’s CHAMP Private Equity appears to have successfully navigated the succession issues that have plagued many of its compatriots. The buyout firm will return with Fund V this year seeking up to A$900 million ($628 million; €559 million). The firm’s 2016-vintage Fund IV was less than half the size of its Fund III after a leadership transition in 2014. A push from LPs was understood to have been partly responsible for its decision to slash Fund IV’s target as they assessed the new team.

Essentials

Magnificent six. Which firms in the PEI 300 have hit the headlines over the last year – and why? We shine the spotlight on six firms from across the ranking that have been making waves – for good or bad – in the last 12 months, from a newly-launched VC firm to a global multi-strategy manager.

Warburg in a China shop. Warburg Pincus is breaking the mould for its second China fund. Documents from a US pension reveal that China-Southeast Asia II, which has a $4.25 billion target, has a six-year investment period and a 12-year fund life, with an additional two years of extension possible. The firm is going against the grain: almost 90 percent of private equity funds have an initial 10-year term, according to Proskauer data from March.

Whistling for the president. It’s Thursday, so we thought you might enjoy this video of Chris Ullman, Carlyle’s former long-time comms director. Ullman is a professional whistler who has performed in the Oval Office, done a TED Talk and written a book on the topic. His rendition of Schubert’s ‘Ave Maria’ is surprisingly calming.

Dig deeper

Small state, sizeable commitments. Rhode Island State Treasury has approved $50 million in commitments, including $30 million to Clearlake Opportunities Partners II. Here’s the breakdown of the $8.26 billion pension plan’s investment portfolio. For more information on Rhode Island State Treasury, as well as more than 6,700 other institutions, check out the PEI database.

He said it

“The US is still by far the best place in the world to invest. The rule of law, transparency, quality of the managers, quality of the exit opportunities. There’s plenty of good opportunities here, you just have to have lower expectations of rates of return.”

Carlyle co-founder David Rubenstein talks through private equity opportunities across the globe with Bloomberg TV


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Today’s letter was prepared by Isobel MarkhamAdam LeCarmela Mendoza and Alex Lynn.


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