Side Letter: How Whitehorse shook up the market, Ardian’s giant fund, raising rescue capital

We have taken a look inside the secondaries market's most talked-about upstart. Plus: news on various rescue funds, more money for seeding new GPs and how Ardian's mega secondaries fund is bigger than people think. Here’s today's brief, for our valued subscribers only.

Just happened

Behind the Whitehorse story

Speak to anyone in the secondaries market and they’ve probably got an opinion on Whitehorse Liquidity Partners. The Toronto-based firm’s meteoric rise – $3.4 billion raised across three funds since 2015 – is driven by a combination of a “genius” strategy and an enigmatic founder: Yann Robard, who built Canada Pension Plan Investment Board’s secondaries business from scratch in the early 2000s. Exactly how the firm managed to grow so quickly and deploy capital so fast was something we set out to understand – and we lay out the findings in the cover story of our April issue.

Specialist preferred equity funds are still a niche pursuit; just Whitehorse and 17Capital have established brands in this space. With the downturn upon us, a closer look at pref is timely: the strategy offers downside protection via preferential cashflow rights and doesn’t impose covenants in the way a debt instrument does, all the while leaving the portfolio holder exposed to future upside.

Vital funding

Swiss impact investment firm Vital Capital has established an emergency debt facility to provide loans of about $1 million each (press release) to companies in sub-Saharan Africa. Vital is seeding its Impact Relief Facility with a $10 million commitment, expects to raise capital from third-party investors and deliver market-rate returns. The shape and impact of covid-19 in Africa – where physical distancing is next to impossible and health systems are already stretched – could look very different from Europe, Asia and North America, according to the World Health Organization.

The firm said: “These loans, which seek risk-adjusted returns, will help fundamentally sound African businesses providing impactful services to weather the economic consequences of the virus and put them in a position to thrive when the pandemic has ended.”

C’est encore plus énorme!

Eagle-eyed readers will have noted reports this week about Ardian having collected $18 billion for the biggest secondaries fund ever raised. Even eagler-eyed subscribers to sister title Secondaries Investor’s platinum product would have already noted last September that the French giant had in fact raised a little bit more than that for the programme: ASF VIII and its co-investment sleeve.

He said it

“Believe it or not, but not all buyside mandates have been suspended for private equity. Some discussions are still active.”

In a worthwhile read on Bloomberg, EY’s global vice-chairman of transaction advisory services, Steve Krouskos, notes that amid all the measures to keep existing portfolio companies afloat, some deals are happening.


New Mexico rescue. New Mexico State Investment Council has approved a $100 million commitment to a fund that will help businesses in the state survive the economic shock of the covid-19 pandemic, writes Buyouts‘ Teddy Grant. The New Mexico Recovery Fund, managed by private equity firm Sun Mountain Capital, will provide short-term loans to companies with more than 40 employees and revenues of at least $10 million at below-market rates.

How defaults work. Sister title Private Funds CFO has re-published this extract from The LPA Anatomised (published in 2018, but still as relevant as ever), in which Goodwin Procter’s Ed Hall lays out the options for GPs that find themselves facing an LP default. It includes items similar to the GP remedies outlined in this article, adding some additional insight on points of negotiation and jurisdictional variations.

Stars aligning. Two of the asset owners behind Capital Constellation have pumped more capital into the joint venture. The Alaska Permanent Fund Corporation and RPMI Railpen have both committed an additional $100 million to the manager, which seeds emerging managers, according to a press release. Want the background on the JV? Here’s Alex Lynn’s story from when it was set up in 2018.

Interested in sustainability? Partners Group published its corporate sustainability report today.

Dig deeper

Seidler’s magnificent seventh. Seidler Equity Partners has closed its latest fund. Fund VII has reached its hard-cap of $800 million after less than 60 days of marketing. The firm stated it was “lucky” to have been in the final stages of paperwork with its investors when the market effects of the covid-19 outbreak took place.

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

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Today’s letter was prepared by Toby MitchenallIsobel MarkhamAdam Le and Carmela Mendoza .

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