Side Letter: CPPIB in venture, Summit’s big move, Visma’s epic PE journey

Summit seeks to do something big in fund restructuring; more barriers to US-China capital flows; Vista's Smith under investigation; and inside CPPIB's venture programme. Here's today's brief, for our valued subscribers only.

Just happened

Summit Partners

With a couple of exceptions, the market for GP-led secondaries deals has been closed since the onset of coronavirus in March. Summit Partners is mulling a transaction that could restart it at scale, with one of the largest GP-led deals ever. The Boston-based GP with an interest in tech and healthcare is considering extracting assets from several funds into a continuation vehicle in a deal likely to be worth “well north” of $1 billion, sources tell sister title Secondaries Investor. The success or otherwise of this process, advised by Evercore, has significance for the whole market.

14 years and counting

Software-as-a-service business Visma is a long-time PE darling. Its journey started with a take-private in 2006. Many transactions later, the company has just been reinvested in by current sponsor Hg (which also did the original take-private) in a transaction valuing the business at $12.2 billion. The latest deal shows how both large institutional investors and financial sponsors increasingly want to remain exposed to quality assets as they go through liquidity events. This time Hg’s Saturn 2 fund (the larger of its fund families) is buying out stakes from Montagu (another buyout house) and its own previous fund Genesis 7. CPPIB is an investor and increases its stake, as does General AtlanticWarburg Pincus and TPG are investing for the first time, joining other existing co-investors GIC and ICG.

Conscious decoupling

The Trump administration has escalated its crackdown on US investment in China. The State Department last week warned university endowments – enthusiastic supporters of PE – to divest from Chinese stocks lest enhanced listing standards spark a wave of de-listings from US exchanges. Already this year President Trump has ordered the $594 billion Federal Retirement Thrift Investment Board to halt plans to back an index containing Chinese stocks over national security concerns. Though government intervention has so far been limited to the public markets, this latest move will do nothing to alleviate concerns in Asia that US LPs are becoming warier of Chinese PE.

Essentials

Under investigation

Robert Smith, the high-profile founder of software-focused mega firm Vista Equity Partners, is under investigation for tax crimes relating to proceeds from Vista’s debut fund, according to an in-depth report from Bloomberg (paywall). Vista wrote a letter to limited partners on Friday after the publication of the article, says a follow-up report in the Financial Times (paywall), in which it wrote that the review of Smith’s tax returns had been revealed to investors as long ago as 2016.

CPPIB’s year in venture

It may be the biggest PE investor in the world (check out our ranking), but The Canada Pension Plan Investment Board is a relative newbie to venture. That said, the giant pension has made a lot of progress since it announced a $1 billion programme last year. Writes Lawrence Aragon of sister title Venture Capital Journal: “Notably, they have been able to access funds from brand-name firms Accel, Andreessen Horowitz (a16z), Index Ventures, Sequoia Capital, True Ventures and Y Combinator. Moreover, they are working quickly, having already committed about one-quarter of their allocation, with an eye toward being fully committed in two to three years.” Subscribers to VCJ can read more about the programme here.

Northern line

The market for subscription credit lines has a new entrant; UK SME-focused OakNorth Bank has extended its debut revolving fund-level facility to Bluegem Capital PartnersSide Letter understands the line is on the consumer-focused PE firm’s continuation fund, which houses assets moved out of an older fund via a 2018 secondaries process. Readers wanting more on how the sub line market has been affected by this year’s crisis should check out sister title Private Funds CFO‘s masterclass on the topic.

She said drew it

Budding artist Zoë Devlin, 10-year-old daughter of MJ Hudson lawyer Eamon Devlin, depicts HarbourVest Partners veteran and Level 20 chair George Anson for a webinar last week. Anson is related to Admiral George Anson, a Royal Navy officer who circumnavigated the globe in the 1700s.

Dig deeper

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

24 August

25 August

26 August

27 August

28 August


Today’s letter was prepared by Toby Mitchenall with Isobel MarkhamAdam LeRod JamesCarmela Mendoza and Alex Lynn.