Side Letter: New Private Markets launch; Carlyle rainmaker departs; PE’s future

It's an exciting day for PEI and the private equity industry alike as we launch New Private Markets, our sustainable investments-focused publication. Here's today's brief, for our valued subscribers only.

They said it

“It would give us financial security, and also let us look at the grassroots of the game. Our game is in trouble. Players aren’t playing, clubs are dying around the country, and we need to invest in the grassroots to make it part of New Zealand society again.”

Former All Black Sir John Kirwan calls on New Zealand’s rugby players to trust their sport’s governing body amid Silver Lake’s offer for a 15 percent stake in the organisation’s commercial rights.

Just happened

New Private Markets and the sustainability megatrend
“It doesn’t do any good to pay a teacher a pension in 2050 if the earth is scorched and their cost of living has gone through the roof because of climate change.” So said Chris Ailman, chief investment officer of the California State Teachers Retirement System, explaining at an online conference last week why sustainability is integral to the pension’s investment activity.

There is a spectrum of sustainability in private markets. At one end is sound management of environmental, social and governance issues; at the other is purpose-driven impact investment. It is clear to us that capital is gravitating towards funds and investments all along that spectrum… and at scale. There is still plenty of cynicism around sustainability, ESG and impact. However, the momentum we see across the spectrum has convinced us that this area needs its own information and intelligence source, with its own dedicated journalists and researchers.

We at PEI felt we have the institutional experience – private markets have been our “home” turf since PEI was founded in 2000 – but we needed a name. We considered something explicit – ‘Sustainable Private Markets’, was a front-runner, but it didn’t convey the inexorable march of an investment mega-trend. Yes, this is about sustainability. Yes, it is about impact and ESG. But it is not solely the domain of those with sustainability in their job title; it is becoming a fundamental pillar of private capital investment. It is the next wave of development for private markets. So please check out New Private Markets, a product that launches today from the PEI stable, and get in touch to share your thoughts.

Another rainmaker departure
David Tung, a managing director at Carlyle Group who set up the firm’s Singapore office two decades ago, is bidding farewell. Tung, who was named in our Rainmaker 50 list of the most influential fundraisers in the industry and has been responsible for managing relationships with the firm’s key institutional investors in Asia, will leave the firm this Wednesday, sources tell PEI. His is the second veteran investor relations departure we’ve reported on in recent days, following BC Partners‘ Richard Kunzer last week. Three’s a trend, and we’ll be keeping our eye out for the next big IR move.

I hear a new world
The next decade for private equity will be very different to the one just past, according to the private fund group at Credit Suisse. Among the changes we are likely to see are an increase in the number of LPs making co-investments without making a fund commitment, new types of secondaries deal and a broader move towards more customised private equity offerings. “Sponsors will be able to exit, recapitalise, liquefy and grow investments in their portfolios in increasingly new ways relative to the traditional paths of simply selling or recapitalising the debt of their businesses,” says Jeremy Duksin, a managing director at the investment bank.

Essentials

So you wanna be in the press?
PEI senior editor Adam Le will be sitting down with alternative assets consultancy MJ Hudson‘s Eamon Devlin and Megan Lau this Thursday for the law firm’s latest webinar. Up for discussion is how to get better coverage in the private equity press, and whether PE is the North Korea of finance. Sign up here.

Dyal/Owl Rock latest
Public or private shares? That’s the question for LPs wanting to continue to invest in GP-stakes firm Dyal Capital Partners after it merges with Owl Rock Capital PartnersNew Jersey Division of Investment is going with private shares, or “partnership units”, in the merged entity, Blue Owl. Corey Amon, the pension’s CIO, says illiquidity of the units means they are not subject to market volatility, pay higher distributions to tax-exempt entities like the pension fund and can be exchanged for public shares in Blue Owl quarterly. More here from affiliate title Buyouts.

Dig deeper

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

30 March

31 March

 

Institution: New Jersey Division of Investment
Headquarters: Trenton, US
AUM: $84.64 billion
Allocation to alternatives: 25.96%

New Jersey Division of Investment has revealed its plan to commit $1.5 billion to private equity during this calendar year at its March state investment council meeting. The plan was proposed by the pension’s private equity consultant, TorreyCove Capital Partners.

A contact at the pension also confirmed a $200 million commitment to Hellman & Friedman Capital Partners X. This is a re-up with one of its existing managers.

As illustrated below, the pension allocates 11.4 percent of its full investment portfolio to private equity. Its recent private equity commitments have focused on investments primarily in North America.

For more information on New Jersey Division of Investment, as well as more than 5,900 other institutions, check out the PEI database.


Today’s letter was prepared by Adam Le with Toby MitchenallRod James and Lawrence Aragon.

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