Side Letter: Hong Kong carry, BX’s insurance chief, EQT’s target, ADIA sale

Chinese GPs are getting pushed on terms; carry in HK is getting an overhaul; Blackstone has a new insurance boss; EQT has a target; ADIA is selling a giant PE portfolio; and more. Here’s today's brief, for our valued subscribers only.

Just happened

Hong Kong dispatches

Panelists at the HKVCA Asia Private Equity ForumTwo takeaways from today’s HKVCA Asia Private Equity Forum, from PEI’s Alex Lynn. Full reports coming soon, but in the meantime:

Chinese GPs are on the back foot after a tough two years A domestic liquidity crisis, trade tensions and a clampdown on tech have all contributed to something of a fundraising slump. As a result, LPs are finding renewed strength during LPA negotiations. That’s according to Lorna Chen, head of greater China at law firm Shearman & Sterling. Chen (pictured second from right) told delegates that LPs are having more success when negotiating terms such as deal allocation and GP removal now that local GPs have less sway.

Hong Kong carry It has been discussed before, but it seems carry tax reform in Hong Kong is getting closer. “We’re going to come up with concrete proposals that will make Hong Kong, if not the most competitive, one of the most competitive [markets] in the world,” said Chris Sun, deputy secretary at the Financial Services and Treasury Bureau. “Barring unfortunate circumstances, we hope to introduce the bill into [the Legislative Council] in the coming months and have it done within this year.”

Blackstone’s insurance hire

Blackstone has appointed Gilles Dellaert as head of its insurance solutions business in New York. It’ll be interesting to see what the former co-president and chief investment officer of retirement and life insurance company Global Atlantic does to expand this part of Blackstone’s offering. Back in 2018, executive vice-chairman Tony James said it had “the clear potential to be our single largest business group” in terms of AUM. Blackstone Insurance Solutions manages more than $60 billion in assets for insurance companies.

EQT sets sights on €15bn

EQT has set the target for its ninth flagship fund at €14.75 billion. This will be its first fundraise since it listed last year. The investment strategy and commercial teams are “expected to be materially in line” with the predecessor vehicle. Isobel Markham has more details.

Essentials

B-Corp status for Helios Pan-African firm Helios Investment Partners has gained B-Corporation status. B-Corp companies are assessed on certain impact criteria, including governance and environment. Helios follows in the footsteps of TowerBrook, Ambienta and Alpine Investors, which have all been certified in the past year. It probably won’t be the last.

Friendly misfire A dramatic headline about PE “hoodwinking” investors on Institutional Investor turns out to be a much less dramatic walk through how IRR is a flawed measure and how investors also like to see multiple of invested capital.

Gulf mega sale update Four months after sister title Secondaries Investor reported that the Abu Dhabi Investment Authority was mulling a secondaries sale, it appears the process has gathered steam. PJT Park Hill has won the mandate to sell around $2 billion worth of PE stakes and the SWF will begin marketing the portfolio within weeks, Bloomberg (paywall) is reporting. With a rush of final closes expected for secondaries funds in 2020, including mammoth vehicles from Ardian and Lexington Partners, ADIA’s sale is likely to be the first of many this year.

Inside tip

We hear a well-known UK-focused mid-market manager is facing a “GP removal” by its LP base. It’s a rare occurrence and we understand in this case that the removal is warranted. Any tips on who the GP is? We’re dying to find out.

Dig deeper

Fubon’s eyes for the Tiger Fubon Life Insurance has agreed to commit $50 million to Tiger Global Private Investment Partners XII. Its recent commitments suggest a broad geographic footprint and a penchant for tech and growth.

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

He said it

“[We’ve] got to make sure that we can give you better pricing than you would get otherwise”

Vanguard chief exec Mortimer Buckley says in a Facebook webcast that the mutual funds giant wants to add value to any private equity products it offers clients


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 MitchenallIsobel MarkhamAdam LePhilippa Kent and Alex Lynn


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

To find out how, email peisubs@peimedia.com, or call our team:

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