Side Letter: Dyal’s debt play, ADIA on data, Partners Group growth

Dyal has another way of accessing GP economics for its investors and we have the details. Here’s today's brief, for our valued subscribers only.

Just happened

Dyal another way

A common concern around GP stake funds is the seemingly limited opportunity set, a consideration that does not seem to trouble Dyal Capital Partners. The Neuberger Berman unit has again increased its target size for Fund IV to more than $8 billion from $6 billion at launch. Dyal’s also in market with an open-ended credit fund that will target its existing portfolio, as well as new GP relationships. Here’s what we know about the vehicle.

ADIA digs dataAbu Dhabi Investment Authority is looking to harness technology to increase its investment efficiency, and expects private equity firms to do the same across sourcing, due diligence and analytics. “Those firms that effectively implement this data-centric strategy will likely see their competitive advantage increase over time as they build a moat of proprietary talent, data and insights,” Hisham Hasan, senior portfolio manager, wrote in its 2018 annual review. The $828 billion sovereign fund has doubled the value of its internally sourced direct PE investment since 2016.

Partners Group growth plans

Partners Group raised €7.4 billion during the first half of the year, with more than half of that raised for PE, according to the firm’s H1 2019 call this morning. Fundraising was spread over 20 individual programmes and numerous mandates. Private equity and private debt grew the fastest, with total AUM net growth at 9 percent. On the secondaries front, co-chief executive David Layton said the firm is pursuing a lot of smaller transactions of younger vintages, as well as in complex portfolios. The firm expects to have 1,500 professionals by 2020.


Who’s best at OpEx? Don’t forget to send in your submission for PEI’s Operational Excellence Awards 2019, which celebrate GPs with recent exits worth shouting about. In their eighth year, and with last year’s winners including everything from a well-loved cookie brand to a struggling automotive interiors business, the awards are the perfect way for firms to demonstrate their value-creation credentials and highlight the good work done over the last 12 months.

You can enter online here or via PDF here. Entries close Thursday 25 July.

Subscription credit lines. Court Square Capital is letting investors vote with their feet when it comes to credit line usage. Sources have told our sister publication Buyouts that the firm is offering investors in its latest fund the choice between a structure that uses a capital-call facility and one that does not. Most LPs are going for the sub line structure, said one of the sources. This is a bold move by Court Square and calls into question the idea that without the credit line, a GP might lose its competitive edge as a buyer and miss out on some investments.

Dig deeper

Hoosier Special. Indiana Public Employees Retirement System has approved $98 million in commitments to York Special Opportunities Fund III and its accompanying co-investment sidecar. Here’s a breakdown of the $35.1 billion US public pension’s total investment portfolio. For more information on INPRS, as well as more than 6,700 other institutions, check out the PEI database.

He said it

“The reason why we don’t do a lot in venture today is because we have an investment committee full of people who have been working together 15, 20 years and they have elephant memories. We just lost too much money during the last dot-com bubble, and we realised last time that’s not a core skill we possess.”

Partners Group’s co-chief executive David Layton on the firm’s venture investments.

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Today’s letter was prepared by Toby MitchenallIsobel MarkhamCarmela MendozaAlex Lynn and Preeti Singh.

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