Happy International Women’s Day!
In recognition of this important date, the latest instalment of On the Minds of Millennials, a Spotlight podcast miniseries, delves into female representation and intersectionality within private equity. It comes after McKinsey & Co research revealed that less than 1 percent of those who make up PE investment committees are women of colour.
In this 18-minute episode, PEI Group’s Mina Tumay and Evie Rusman speak to Devin Glenn, global head of DE&I at Blackstone; and Jordana Semaan, head of HR, Gulf and Asia, and global head of DE&I at Investcorp, about the challenges they have faced trying to build their careers in a white male-dominated industry. Listen here.
IWD and, by extension, this podcast, come at a critical time for the issue of representation in the private markets. According to PEI‘s latest LP Perspectives survey, the proportion of investors refusing to fund an opportunity based on a lack of diversity and inclusion at the GP level has fallen from 20 percent to 13 percent in the last 12 months. Very few investors are yet to classify their GPs’ ESG performance as ‘excellent’, with only 1 percent fully satisfied with diversity and inclusion efforts at their GP.
Though the direction of travel for PE’s female representation has been largely positive, as evidenced by the meteoric growth of networks such as the 2,000-strong Senior Women in Private Equity, the McKinsey data is a sobering reminder that there is still much work to be done in improving diversity, equity and inclusion more broadly.
We’ve written a lot about private wealth appetites for the private markets of late. It is timely, then, that Campden Wealth and Titanbay have this morning published their inaugural Ultra-High Net Worth Private Equity Investing Report 2023. The report surveyed 120 ultra-high-net-worth (UHNWI) individuals between August and December 2022. Here are some of the key findings:
- Most (84 percent) of UHNWIs are already active in PE, with another 10 percent actively interested.
- The average investor allocates 20 percent to PE, with a roughly even (52:48) split between directs and funds.
- The average ticket ranges between $1.8 million and $6.9 million per company and $7.3 million and $9.1 million per fund.
- UHNWIs on average plan to hike their allocations to 23 percent, with directs set to benefit most.
- Funds smaller than $250 million are most preferred.
- Buyouts have rewarded UHNWIs most strongly, with a 31 percent average IRR, followed by growth equity and special sits (25 percent).
- About one-quarter (24 percent) of UHNWI PE portfolios are in responsible investments, though this is expected to rise to 38 percent.
- Only 14 percent access PE via digital platforms.
Joining the team
Arctos Sports Partners has hired longstanding Kirkland & Ellis partner Michael Belsley as partner and general counsel, according to a statement from Kirkland shared with Side Letter. Belsley, who will start in Q2 2023, has worked with senior members of the Arctos team for almost two decades, advising on transactions, fund formation and other mandates.
He joined Kirkland in 2000 and became a partner in 2002. During his time at the firm, he focused on advising buyers, sellers, fund sponsors and market intermediaries across a wide array of complex secondaries market activities. Belsley said in a statement he “fully expected” to spend his whole career at Kirkland, “but Arctos presented an opportunity I simply couldn’t refuse”.
Arctos was the first-ever winner in the newly introduced Sports-Focused Private Equity Firm of the Year category in the PEI Awards 2022. The specialist firm committed $1.3 billion across 15 investments in 10 global sports platforms over the awards period, and became the only firm invested in all major North American sports leagues that allow institutional capital, including the National Basketball Association, Major League Baseball, National Hockey League and Major League Soccer.
Permira hauls in €16.7bn
Permira has announced the final close of its latest flagship buyout fund, Permira VIII, on €16.7 billion, exceeding its target of €15 billion. This marks an increase of 50 percent on the fund’s predecessor, which closed on €11 billion in 2019.
The fund had a re-up rate of 90 percent, per a statement on the close, and will follow Permira’s investment strategy of partnering with global market leaders across four main sectors: technology, consumer, healthcare and services. Permira VIII has already committed to four firms: Mimecast, Zendesk, Reorg and Acuity Knowledge Partners.
Kurt Björklund, managing partner at Permira, commented on the close: “This fundraise is testament to the close relationships we have built with investors over nearly four decades… Across both P8 and [Permira Growth Opportunities II], we now have committed capital of more than €20 billion to invest across both our buyout and growth equity strategies.”
Institution: South Carolina Retirement System
Headquarters: Columbia, US
AUM: $38.2 billion
Allocation to private equity: 15.4%
South Carolina Retirement System has committed $256.9 million across five private debt and equity funds, according to minutes from the pension’s March 2023 commission meeting.
The commitments comprised $50 million each to Fortress Lending Fund III, Gemspring Capital Fund III and Alpine Investors IX; $75 million to GoldenTree Loan Management III; and €30 million to Hg Mercury 4. SCRS has been a long-term investor in Hg funds in particular, committing $46.8 million to Hg Saturn 3 in March 2022 and $50 million to Hg Genesis 10 in April 2022.
The $38.2 billion US public pension’s private equity fund commitments tend to focus on diversified global vehicles targeting buyout or debt returns.
For more information on South Carolina Retirement System, as well as more than 5,900 other institutions, check out the PEI database.
Today’s letter was prepared by Alex Lynn with Carmela Mendoza, Helen de Beer and Madeleine Farman