Side Letter: Insight’s no-fee, no-carry fund; PE valuations; TPG’s Next head

Insight Partners eyes a major step up in its diverse-focused fund of funds. Plus: LPs should be proactively asking their GPs about valuations and TPG taps a former Jasper Ridge exec to lead its diverse talent seeding platform. Here's today's brief, for our valued subscribers only.

Just happened

Insight’s Vision
Sometimes a GP launches a strategy that becomes so successful, its follow-up vehicles are many times the size of the original iteration. For software-focused Insight Partners it appears to be doing just that. Last year, the firm raised $15 million for its Vision Capital 2020 fund targeting emerging, diverse venture capital and growth managers. The capital for that vehicle was raised entirely from Insight’s senior managing partners. Documents prepared for the Pennsylvania Public School Employees’ Retirement System show the firm is now seeking as much as $150 million for a predecessor vehicle, Insight Vision Capital II. The figure comprises $50 million from LPs and the remainder from the firm and its affiliates.

Vision II does not charge fees or carry, according to the documents. The vehicle is a fund of funds that aims to invest with “younger qualified female and minority general partners who are operating their own fledgling venture capital firms but may not have the name recognition or the finances to help female- and minority-owned start-up companies succeed”. It’s aiming for an October final close, according to the documents.

Asking the right questions
LPs would do well to proactively ask GPs for up-to-date asset valuations, according to a report from Equable Institute. Perceived lags in managers’ estimate of the worth of the assets they oversee can mean that LPs end up making investments that will not see the returns that they expected.

“There are enough yellow and orange flags, if not red flags, that show valuations may not reflect what an orderly market transaction should reflect,” said Equable Institute executive director Anthony Randazzo.

While write-downs and write-ups happen over a series of quarters, rather than in one dramatic shot, GPs still have sole discretion over the valuation of private assets, our colleagues at Buyouts note (registration required).


TPG NEXT’s head
TPG has appointed Pamela Pavkov, a former partner at Jasper Ridge Partners, as head of TPG Next, per a statement. The role is new, it is understood. Pavkov will be responsible for driving the unit’s strategy, sourcing, execution and portfolio management. Previously, NEXT was led by a group of senior sponsors including Jon Winkelried, chief executive of TPG, and Anilu Vazquez-Ubarri, partner and chief human resources officer at the firm, who along with others continue to be closely involved. The strategy, which sits within TPG’s global impact investing initiative, was launched in early 2021 as a GP seeding platform focused on diverse talent. NEXT has backed three GPs thus far: Harlem Capital Partners, a venture firm in which TPG had made a non-control investment in 2019; early-stage venture firm VamosVentures, which focuses on the Latinx community; and LandSpire Group, a Black-owned real estate firm.

Read more about where NEXT gets its capital, how it plans to exit its investments and which GPs it plans to back in our interview with Vazquez-Ubarri last year.

Dig deeper

Institution: Korea Investment Corporation
Headquarters: Seoul, South Korea
AUM: $117.1 billion
Allocation to alternatives based on fair value: 14.35 percent

Korea Investment Corporation is aiming to increase its assets under management to $200 billion by 2025. It is seeking to generate stable mid- to long-term profits, and continuously expand alternative investments and discover new asset classes to enhance diversification and mid- to long-term returns. The firm plans to:

  • Increase its alternative investment allocation from 18 percent in 2021 to 26 percent by 2025.
  • Enhance alternative investment capabilities and promotion of alternative direct investment to reduce fees.
  • Expand new strategies by increasing investment in strategies that are expected to grow in the mid- to long-term, such as venture investment and private placement bonds, to secure additional profit-generating opportunities.
  • For private equity, it will expand the proportion of investments in venture capital companies that captures technological innovation and changes in consumer preferences. It will continue to invest in the TMT sector, including AI, robots, platforms and big data, as well as new industries.

KIC has a 5.55 percent allocation to private equity, which comprises $6.44 billion in capital.

Today’s letter was prepared by Adam LeCarmela MendozaMadeleine Farman.