Side Letter: L Catterton’s exodus, Hillhouse returns, Ethos’s covid-19 fund

How LPs passed a signicant change to an L Catterton key person clause. Plus: Hillhouse's $13 billion fundraise and Ethos's covid-19 rescue fund. Here's today's brief, for our valued subscribers only. 

He said it

“Support minority-owned businesses. Policing is closely tied to class, just as socio-economics are closely tied to race.”

Frederick Baba, a managing director at Goldman Sachs, recounts his experience (paywall) as a black man in finance against a decades-long backdrop of racial injustice. He notes four actions he would like his colleagues to take.

Just happened

L Catterton’s Asian exodus

A string of senior departures at L Catterton’s Asia unit has raised questions over the firm’s key person clause, namely: why wasn’t it triggered? Last week, Private Equity International reported that the firm secured LPAC approval in Q3 2019 to make sweeping changes to the clause on its 2017-vintage L Catterton Asia III prior to final close. What’s not yet clear is why the LPAC – which included the fund’s largest LP JPMorgan Private Bank – would be content to overhaul a fund’s leadership mid-raise. In related news: on Sunday it emerged in a DealStreetAsia report, that the firm had tapped TPG’s Scott Chen as co-managing partner to replace outgoing founder Ravi Thakran.

Hillhouse returns

China’s Hillhouse Capital is back with another mega-fund. The Hong-Kong headquartered firm is seeking $13 billion for Fund V, of which $10 billion will be earmarked for M&A and the remainder for venture capital or growth equity, according to the Chinese-language website Eastmoney.

PE to the rescue

Asset manager Ninety One and South African manager Ethos Private Equity have launched a covid-19 focused impact fund, SA Recovery Fund, targeting 10 billion rand ($600 million; €530 million), according to a statement. Priorities for the fund include protecting South African companies’ productive capacity during the next 24 months and preserving jobs. First close is expected by July.

Essentials

KZVK & VKPB, a €14 billion German church pension fund which supports the retirement of clergy, medical and educational professionals, has been investing in PE since 2000. Carmela Mendoza spoke to senior portfolio manager Byron Beene about what sort of crisis the pension, which made its first two co-investments last year, is having. Read the full interview here.

How PE gets into 401(k)s

Want a quick primer on exactly how – following the US government’s blessing – private capital investments will make their way into individual savers’ portfolios? Chris Witkowsky breaks it down.

What you’re reading

Our most-read piece of content last week was Alex Lynn’s investigation into events at L Catterton (referenced above). After that, here is what caught your attention:

Dig deeper

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

8 June Louisiana School Employees’ Retirement System; Montana Board of Investments

9 June – London Pensions Fund Authority (LPFA); Public School and Education Employee Retirement Systems of Missouri; San Bernardino County Employees’ Retirement Association (SBCERA); Los Angeles City Employees’ Retirement System

10 June – Connecticut Retirement Plans and Trust Funds; San Francisco Employees’ Retirement System; Los Angeles County Employees’ Retirement Association; Alameda County Employees’ Retirement Association (ACERA); City of Fresno Retirement Systems

11 June – New Mexico State Investment Council; Oklahoma City Employee Retirement System; Tacoma Employees’ Retirement System

12 June – Surrey County Pension Fund


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Today’s letter was prepared by Toby Mitchenall with Isobel Markham, Adam Le, Rod James, Carmela Mendoza and Alex Lynn.


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