Side Letter: ILPA 3.0, new secondaries venture, Germany stalls

Compliance is off the agenda when it comes to co-investments; Schroder Adveq secondaries chief goes it alone; and dealflow remains stagnant in Germany. Here’s today's brief, for our valued subscribers only.

Just happened

ILPA 3.0 reactions

We’ve spent the last week chatting to market sources about ILPA’s latest PE Principles 3.0 and, surprise surprise, co-investments are a hot topic. Jos van Gisbergen (pictured), senior portfolio manager at Dutch pension manager Achmea Investment Management, tells us the number of high-quality GPs and large LPs with active co-investment programmes that comply with the principles is sadly small.

“In a market where demand for great funds is exceeding supply, GPs are able to further shy away from best practice,” he says.

Van Gisbergen adds that ILPA’s latest guidance could have shed more light on the sales of GP stakes to LPs, which are causing a misalignment of interest and potential governance issues. Looks like the industry body has its work cut out already.

New firm launch

Schroder Adveq’s head of secondaries is leaving to launch his own firm, sister title Secondaries Investor is reporting. Nico Taverna, who has held the position since 2014, will depart the Swiss manager at the end of the year. There’s been no word on what his new venture will be called or what its strategy will be, but we’ll keep our eyes peeled.

Germany stalls

PE dealflow in Germany as of June was in line with the long-term average, according to a survey of around 50 domestic investment managers commissioned by Deutsche Beteiligungs. In its semi-annual Mid-market Private Equity Monitor, the PE firm said the results were a “warning signal” given that record inflows into the sector should mean the market is growing significantly. The cause? Fear of macro volatility and geopolitical uncertainty. The result? Complicated M&A pricing, DBAG says.


Mumbai low, sell high Private equity is deploying the big bucks in India despite a slowdown in dealmaking prompted by election uncertainty. According to Grant Thornton, firms spent $12.5 billion across 306 deals in the first five months of this year, compared with $7.5 billion over 342 transactions for the same period in 2018. Investment bank BDA’s Kumar Mahtani tells us of how a recent liquidity crisis has prompted some companies to divest non-core assets and that this trend should continue.

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

Inside tip

Congratulations to the Canadian pension fund PE exec who correctly identified the Glastonbury Festival-attending global placement agent head from last Thursday’s Side Letter. We’d love to tell you who the festival-goer was but, y’know, what happens at Glasto…

Dig deeper

Lone Star State commitments Employee Retirement System of Texas has agreed to commit €80 million to Riverside’s latest European fund. Below is a breakdown of the $28.7 billion pension fund’s investment portfolio. For more information on Texas ERS as well as more than 6,700 other institutions, check out the PEI database.

He said it

“It’s riddled with conflicts. There are situations where we can potentially be involved in both sides and we have to split our teams and decision-making process.”

Merrick McKay, head of Europe, private equity, at Aberdeen Standard Investmentssays his firm sometimes finds itself in tricky situations when it comes to GP-led restructurings.

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Today’s letter was prepared by Adam LeIsobel Markham and Alex Lynn.

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