Side Letter: Ardian on secondaries, Stafford and Robeco, PE’s mega-platforms visualised

The future of PE is liquid (sort of). Plus: Stafford's entry into European PE, how the largest firms compare by product offerings and Ardian's take on secondaries. Here's today's brief, for our valued subscribers only. 

They said it

“[Labor Secretary Eugene] Scalia has rolled back rules that protected workers’ retirement security. This should be seen as a gift to private equity firms, not a favour to workers who are unlikely to cash in on mythical high PE returns.”

In a statement, the Center for Economic and Policy Research voiced its objections to the Department of Labor’s decision to allow certain private equity investments to be included in defined contribution retirement plans.

Just happened

The future is liquid

Options, swaps, forwards on PE fund stakes – could this be the future for private equity? Within 10 years, private equity will become an asset class that provides multiple options for both investors and sponsors, according to Holcombe Green, global head of private capital advisory at Lazard, who spoke to us for our PEI 300 coverage. “We’ll start to see more financial instruments crop up that make the secondaries market look more like a financial market. Derivatives on secondary trades, trading platforms for LP interests. If the market gets enough scale, you’ll start to see it act more like a securities market,” Green says. Predictions of this type are nothing new and market participants have long suggested private equity would do well to import technology from other financial markets to create greater liquidity for LPs and GPs. The capital is there already: anywhere between $91 billion and $155 billion in dry powder is available in the secondaries market, and Ardian’s $19 billion haul last week added to that pile.

Stafford buys Robeco

Stafford Capital Partners isn’t the biggest name in private equity but is well known in real assets, with niche strategies like timberland and agri funds of funds. The firm has now made a splash into European PE with the acquisition of Dutch asset manager Robeco’s private equity unit (press release here) in a deal that adds $1.5 billion to Stafford’s AUM. Stafford is raising a PE fund – SEPE VI – and is understood to be seeking €250 million for the vehicle, of which as much as half will be allocated to secondaries and co-investments.

We did the math

Mega-platforms. Here’s how the largest firms in the world span more than just private equity. For the expanded (and more eyesight friendly) list of 50 firms and their various fund lines, click here.


Calling the bottom

Subscribers to sister title Secondaries Investor have been treated to some insight into the strategy of the largest player in that market, Ardian (paywall), which recently closed on $19 billion in committed capital for its latest secondaries programme. Here are some choice cuts from the firm’s UK head Olivier Decannière:

  • “Definitely, I think 2021 will be a good time to deploy in the secondaries market, when people gain a bit of visibility, when they realise where the bottom was and what kind of recovery we can expect.”
  • [On the availability of transaction finance] “We were afraid the economics would drop significantly and the loan-to-value would move down. It has but not by much – we are talking about 10 basis points between pre-crisis and post-crisis, which is almost nothing.”
  • [On preferred equity] “I know more of our competitors are doing them. I also see the great success of players dedicated to that kind of strategy. We don’t. We have been successful across different crises and we believe doing pure equity, structuring deals the way we are used to, is the best way.”

Fund admin in the covid-19 era

Find out how the crisis is accelerating existing trends in fund admin and technology adoption with all PEI‘s special report Fund Administration 2020.

Dig deeper

Institution: New Mexico State Investment Council
Headquarters: Santa Fe, United States
AUM: $26.85 billion
Allocation to alternatives: 21.13%

New Mexico State Investment Council announced a commitment of $75 million to New Mountain Partners VI, a contact at the sovereign wealth fund informed Private Equity International. The $26.85 billion US sovereign wealth fund has a 12 percent target allocation to private equity that stands at 9.68 percent.

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

We would love your feedback to help us make this newsletter more useful; click here to give us your opinion.

Today’s letter was prepared by Toby Mitchenall with Isobel Markham, Adam Le, Rod James, Carmela Mendoza and Alex Lynn.

Subscribe now and get Side Letter delivered to your inbox each day

To find out how, email, or call our team:

London: +44 207 566 5432
New York: +1 646 545 6296
Hong Kong: +852 2153 3140