Side Letter: Goodman’s new team, AP7’s big PE plan, the case for positive discrimination

A new firm targeting GP interests, a Swedish pension that wants to go big on private markets, and the case for positive discrimination in private equity. Here's today's brief for our valued subscribers only.

She said it

“A lot of people would like to see the end of getting on a plane to have two speculative meetings in Minnesota”

Gabrielle Joseph, head of due diligence and client development at placement agent Rede Partners, considers the long-term future for investor roadshows at the Women in Private Markets Forum this morning

Just happened

The G Unit
Credit ace Bennett Goodman (known for being the ‘G’ in GSO Capital Partners) has launched a firm, Hunter Point Capital, to buy minority interests in mid-market alternative asset managers. Avi Kalichstein (Easterly, JC Flowers & Co, Goldman Sachs) will be chief executive and Goodman will be executive chairman. Michael Arpey, former global head of investor relations at the Carlyle Group, joins as president. Other members of the HPC team include: Rex Chung, the former head of the client and partner group in Asia at KKR; Debra Bricker, ex-CFO at Harvest Partners; and Mariska Richards, currently a partner at law firm Kirkland & Ellis.

The group of financial investors fishing in the pond for mid-market GP interests is growing. Investcorp, Volunteer Park Capital, Stonyrock Partners, Leucadia Asset Management, Rosemont Investment Group and Bonaccord Capital Partners (a unit of Aberdeen Standard Investments) are all either active in the space or moving into it.

Positive discrimination
Private equity firms should prioritise candidates from underrepresented groups to boost diversity, said a senior partner with mid-market buyout shop Hg.

“You’re trying to unbalance however many millennia of bias and probably still some unconscious bias,” said Nic Humphries, appearing on a panel at Private Equity International‘s Women in Private Equity Forum yesterday. “The only way you can realistically counterbalance that huge history… is to positively give it a nudge in the right direction.”

Citing data from Harvard Business School, Eurazeo chief executive Virginie Morgon said in January that women make up just 6 percent of private equity decision-makers while woman-led businesses in the US and Europe account for just 2.2 percent of all PE-backed firms.

Gimme! Gimme! Gimme! (more PE)
Sweden’s largest public pension is so hungry for alternatives it may expand into other asset classes regardless of whether it receives a green light from the government on lifting the amount of exposure it can have to unlisted assets. PEI’s Adam Le reports that Per Olofsson, AP7’s head of alternative investments, has said that the €63 billion institution has been exploring ways of increasing its private equity exposure and adding infrastructure, real estate and private debt. “I think it makes a lot of sense for the savers, especially since we are so long-term in our investments,” Olofsson said. Amen to that.

Essentials

North Dakota
North Dakota’s state investment board has tasked investment consultant Callan to help it look into creating an in-state investment programme, our colleagues at Buyouts are reporting. The programme would use funds from the state’s $7.5 billion Legacy fund, built up from oil-and-gas industry tax revenue. The study still needs final approval to go ahead. The fund already has a $400 million in-state lending programme with the Bank of North Dakota.

Dig deeper

Institution: New Mexico State Investment Council
Headquarters: Santa Fe, US
AUM: $26.96 billion
Allocation to alternatives: 22.12%

New Mexico State Investment Council backed two private equity funds from KKR and Scale Venture Partners, according to an October meeting material document.

Highlights from New Mexico SIC’s investment meeting:

  • The $26.96 billion pension invested up to $75 million to KKR Asian Fund IV, which focuses on consumer goods, manufacturing and TMT. The fund is targeting $12.5 billion, according to the meeting document.
  • New Mexico SIC also committed $25 million to Scale Venture Partners VII, which invests in the TMT sector in North America.
  • The pension approved its annual investment plan for FY 2021, and projects that it will invest up to $350 million next year.
  • New Mexico SIC’s allocation to private equity sits at 10.34%, according to PEI data. The system has set a 12 percent target for the asset class for 2021.
  • Mercer is the system’s private equity consultant and advisor and worked with New Mexico SIC on its investments with the KKR and Scale Venture Partners funds.

Robert ‘Vince’ Smith serves as New Mexico SIC’s chief investment officer and deputy state investment officer. Prior to joining the pension in 2010, Smith was CIO of Kansas Public Employees Retirement System. Steve Moise is the system’s state investment officer. He also serves as managing member of Moise Livestock Company, according to his LinkedIn profile.

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


Today’s letter was prepared by Toby Mitchenall with Carmela Mendoza and Alex Lynn.

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