Side Letter: Inside Investcorp, Leonard Green’s performance, credit co-investments for LPs

Investcorp is the latest in our look at stealth firms; Leonard Green seeks $12 billion; Vista returns. Here's today's brief, for our valued subscribers only.

Just happened

Investcorp shakes it up

Mohammed-Al-Ardhi Side Letter
Photograph: James Clarke

Next up in our Deep Dive on stealth firms is Investcorp. Long a bridge between Gulf-based investors and alternative assets in the West, the Bahrain-listed firm has transformed rapidly of late. Led by executive chairman Mohammed Alardhi (pictured), it has pushed into China and Asia, aggressively grown its institutional investor base and is targeting $50 billion in assets under management by 2024. Bear in mind that this figure was $10.8 billion at the end of June 2016. Find out about the challenges of Investcorp’s rapid growth strategy and how it is balancing the interests of old investors with the new.

Leonard Green’s expanded strategy

At $10 billion, Leonard Green’s eighth Green Equity Investors flagship fund has a marginally higher target than its $9.6 billion predecessor that closed in 2017, but that’s not the only target the firm has in its sights: it’s also looking to raise $2 billion for its new mid-market buyouts strategy, Jade Equity Partners. The fund will invest in smaller businesses in consumer/retail, business services and healthcare and wellness. Check our interactive charts exploring the performance of the firm’s flagship funds.

LPs eye debt directs

As private equity co-investments have become commonplace, many LPs are now broadening their horizons to include credit, sister publication Private Debt Investor reports in this podcast. The upshots include fee breaks for LPs and larger hold-sizes for GPs. It also breeds closer relationships for both credit managers and their investor bases, in some instances allowing the latter to see how the former underwrites and executes transactions.


Vista’s fund on the horizon. Vista Equity Partners has returned to the fundraising trail with its fourth mid-market vehicle. The firm is seeking at least $3.25 billion for Foundation Fund IV – a figure that could rise to at least $4.5 billion, according to sister publication Buyouts. Vista has tapped principals Rob Rogers and Marc Teillon to co-head the fund, with the latter having moved from its flagship vehicles to replace Alan Cline, who was named co-head of Vista’s small-cap Endeavour funds.

Vive le French PE! Private equity investment by members of France Invest hit €7.8 billion in the first half of the year, up from €6.1 billion YoY and a 16 percent increase on 2014. Fundraising has also climbed: French managers raised €8 billion in the first half, a 21 percent increase. Mega-hauls drove the rise, with €3.7 billion collected by funds over €1 billion compared with €1.7 billion in the first half of last year.

Dig deeper

Louisiana goes for Green. Teachers’ Retirement System of Louisiana has agreed to commit up to $50 million to Green Equity Investors VIII and up to $25 million to Jade Equity Investors. Here’s a breakdown of the $20.89 billion US pension’s total investment portfolio. For more information on TRSL, as well as more than 5,900 other institutions, check out the PEI database.

TRSL Teachers Louisiana side letter chartShe said it

“This rise in demand [for impact] also comes with a risk: ‘impact washing’. Like its better-known cousin ‘green washing’, this is when a fund labels traditional investments as impact investments in an attempt to benefit from the positive attributes linked to the trend.”

Deborah Zurkow, global head of alternatives at Allianz Global Investors, says investors should be cautious of funds that try to exploit the reputation of impact investing without providing for the social good.

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Today’s letter was prepared by Isobel MarkhamAdam LeRod JamesAlex LynnPreeti Singh, and Andrew Hedlund.

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