Side Letter: Apollo’s braced for impact, MassPRIM on marks, Ardian and Neuberger fundraising notes

They said it

“Historically, we’ve been highly inconsistent with our capital deployment. And, the truth is, that has hurt us. Consistent capital deployment does not guarantee success. But inconsistent capital deployment creates a self-imposed obstacle that is difficult to overcome.”

Greg RuizCalifornia Public Employees’ Retirement System’s head of private equity, shares one of the reasons why the pension’s PE programme has underperformed over time, at an investment committee meeting on Monday. Read Carmela Mendoza’s story here.

Just happened

Braced for impact

Apollo Global Management has announced the leadership team for its new impact investing platform, Apollo Impact. Firm veteran Marc Becker will co-lead with Joanna Reiss, who joins from Cornell Capital, where she was a founding partner and led the ESG programme. Lisa Hall, who joins from Georgetown University’s Beeck Center for Social Impact and Innovation, has been named chair of impact, and will help develop and oversee the platform. Apollo is understood to be seeking $1 billion for its debut social impact fund, per a Bloomberg report last summer.

Valuation resuscitation 

Private equity marks are returning to – and in some cases surpassing – pre-lockdown levels, according to investment officers at the Massachusetts Pension Reserves Investment Management Board. Investment director Michael Bailey told trustees that the public markets recovery and easing of lockdowns had allowed “the private equity managers to re-mark those holdings to much higher values”. He added: “We think we’ll be able to re-trace and actually go past those negative reports from March.” Read Justin Mitchell’s full report here.

Ardian Expansion

Private markets giant Ardian just doubled the size of its mid-market fund programme. Ardian Expansion Fund V closed at €2 billion after six months of fundraising, the firm said this morning. Previous investors in the programme accounted for half of Fund V, managers committed nearly 5 percent of the capital and the fund attracted SWF money for the first time. Fun fact: the Expansion team distributes part of its capital gain to all employees of its portfolio companies at exit.

More time to raise

The $357 billion global investment firm Neuberger Berman joined those asking for more time to raise capital amid the pandemic. It requested fundraising extensions for two of its vehicles – an additional four months for NB Strategic Co-Investment Fund IV and six months for NB Private Equity Impact Fund “to accommodate potential LPs that required more time”, noted 11 September pension fund committee documents for the Oxfordshire Pension Fund. LPs would typically be supportive of such requests and expect fundraising timelines to lengthen to up to six months, industry participants told PEI in March. About a third of GPs in PEI’s May Covid-19 Study said they are extending the fundraising period, while 64 percent were looking to carry their fundraise to the initially planned timetable.


Interested in African PE intel?

Our regional guides on NorthSouthernEast and West Africa should do the trick. With the ratification last year of the African Continental Free Trade Area, which is designed to create a single continental market for goods and services, private equity activity is expecting a boost. Click here for an overview in presentation format.

KKR’s Asian tech push…

…is the subject of an FT profile this morning (paywall), chronicling the New York firm’s progress in building a platform and reputation for growth investing in the region. One anonymous co-investor reportedly says: “When they started doing Asia tech, like investing in Gojek [an Indonesian ride-sharing firm] in 2016, it caught everyone by surprise. Now, though, their through process has evolved.”

Dig deeper

Institution: South Carolina Retirement System
Headquarters: Columbia, United States
AUM: $30.98 billion
Allocation to private equity: 7%

South Carolina Retirement System has confirmed $957 million-worth of commitments across nine private equity vehicles between April and August 2020, according to minutes from the pension’s September 2020 commission meeting.

The commitments confirmed in Q2 2020 comprised $100 million to Francisco Partners VI; $50 million to Francisco Partners Agility II; €100 million to CVC Capital Partners VIII; $75 million to Clayton, Dubilier & Rice Fund XI; $100 million to Eagle Point Credit Partners; and £75 million ($96 million; €81 million) to Bridgepoint Development Capital IV.

Private equity commitments approved by SCRS in Q3 2020 comprised $100 million to Silver Lake Partners VI; $200 million to Horsely Bridge Strategic Fund V; and €100 million to Nordic Capital X.

For more information on SCRS, as well as more than 5,900 other institutions, check out the PEI database.

Today’s letter was prepared by Toby Mitchenall with Isobel MarkhamAdam Le and Carmela Mendoza.

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