Side Letter: Marvel-ous news for HNWs, Myanmar’s PE setback

Robert Downey Jr has become an unlikely contributor to the democratisation of PE. Plus: Myanmar's ESG efforts may not be enough to distract from its military coup d'état and Ravi Thakran's SPAC has found a target. Here's today's brief, for our valued subscribers only.

He said it

“In terms of the level of scrutiny applied across the gamut of investment asset classes, I think we’re the most thorough and place the greatest onus on inbound investors to satisfy our regulators.”

Lachlan Molesworth, director at consultancy Foreign Investment Advisory Australia, tells sister title Agri Investor (subscription or registration required) that the country’s Foreign Investment Review Board has become a ‘de facto security regulator’.

Just happened

Marvel-ous news for HNWs
More good news for wealthy Americans: Marvel actor Robert Downey Jr has launched an ESG-focused venture capital fund targeting qualified and accredited investors, TechCrunch reports. Footprint Coalition Ventures will back early and late-stage companies that are using tech to restore the planet. It will employ a rolling fund model that accepts quarterly subscriptions of $5,000 and a minimum one-year commitment. A rising number of PE firms, such as Hamilton Lane, are making overtures to the comparatively untapped retail market of late, however, the fate of this push may lay with a Democrat-controlled Senate, as Side Letter explored here.

Myanmar’s setback
Myanmar’s fledgling PE market is likely to have suffered a considerable setback this week following a military coup d’état. PE deal count in Myanmar has picked up in recent years thanks, in part, to a small band of local GPs with a strong focus on ESG, as PEI explored in its recent Emerging Markets Special. Though most of the market’s fund commitments to-date have been provided by risk-friendly DFIs, even the most intrepid institution might hesitate to invest while Myanmar’s democratic future remains on a knife-edge.

Ravi SPAC-ran
Aspirational Consumer Lifestyle Corp, a SPAC led by Ravi Thakran, former managing partner of L Catterton Asia, has agreed to acquire US aviation business Wheels Up. The de-SPAC – as such transactions are known – values Wheels Up at $2.1 billion, per a statement. De-SPACs should become a familiar sight in 2021 as the mountain of capital raised last year for SPACs starts being put to work. These deals can present an exit opportunity for PE firms like Blackstone, which has signed two such transactions over the past three months, as we noted in January.


Care home controversy
The UK’s Local Government Association has called for a review into PE ownership of children’s care homes. In a statement last week, the body criticised the profits and debt burdens of some providers amid what they perceive to be deterioration in quality. Nearly three in four children’s homes and two in five fostering households are provided by private firms or charities, the report noted. All but one of the six providers that reported negative net assets – including intangible assets – in the review were PE-backed.

Dig deeper

Institution: New York State Common Retirement Fund
Headquarters: Albany, US
AUM: $216.3 billion
Allocation to alternatives: 19.6%

New York State Common Retirement System has confirmed $418.1 million-worth of private equity commitments to eight vehicles, according to the pension’s December monthly investment disclosure report.

The commitments comprise of $200 million to Hamilton Lane – New York Credit Co-Investment III, $100 million to 57 Stars Global Opportunity Fund (NYSCRF), $50 million to 57 Stars Global Opportunity Fund 5 Direct Impact, $20 million to Valor Equity Partners V, $15 million to Loyal Valley Capital Advantage Fund III, A$17.04 million ($13.1 million; €10.8 million) to Pemba Capital Partners Fund II, $10 million to DCP Capital Partners II and $10 million to Innovation Endeavors IV.

The $216.3 billion US public pension has a 10 percent target allocation to private equity that stands at 9.4 percent.

The pension fund’s recent commitments are to vehicles focused on the business services, technology, financial services, healthcare and manufacturing sectors within Asia-Pacific, Europe, Middle East/Africa, Latin America and North America.

For more information on NYSCRF, as well as more than 5,900 other institutions, check out the PEI database.

Today’s letter was prepared by Alex Lynn with Rod James and Carmela Mendoza.

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