Side Letter: Nordic’s new deal for Trustly, Abraaj saga, capital call data

Is this a new type of deal we see before us? Nordic has brought in secondaries and co-investment capital to power up an existing investment. Here's today's brief, for our valued subscribers only. 

He said it

“[If] we were to liquidate private equity and real estate, I would argue that we have probably lost far more money than we think we have.”

Sung Won Sohn, the chairman of Los Angeles City Employees’ Retirement System, pours a little cold water on PE valuations in sister publication Buyouts.

Just happened

Single-asset direct late-stage co-investment…

Nordic Capital has found an unusual way of securing fresh capital for top-performing asset Trustly, which it acquired in 2018.

A consortium including BlackRock, Neuberger Berman and Aberdeen Standard Investments bought a minority stake in the payments business from existing shareholders in a deal valuing the business at more than $1 billion, sister title Secondaries Investor reported. Backers of the deal, advised by Citi’s private funds group, used a mix of secondaries and co-investment capital.

Nordic is no stranger to innovative secondaries plays: the firm ran a landmark fund restructuring in 2018 (you can read about the complications in the process here).

“The analysis investors have done was no different from a single-asset secondary but the ultimate commitment was not into a continuation fund vehicle, but to get a stake in the company directly,” said a source with knowledge of the matter, adding that it could be described as a “direct single-asset process”. The aim was to provide liquidity for exiting investors and bring in larger, more aligned investors through a process that Nordic could control, they added.

Do you have an asset that you’d like more capital to develop in a fund too young to restructure? This might be the solution.

Bridgepoint’s billion-dollar dev fund

Bridgepoint (owner of Side Letter publisher PEI Media) is expecting to hold a first close on Bridgepoint Development Capital Fund IV, which is in market with a hard-cap of £1.5 billion ($1.9 billion; €1.7 billion), in Q2, according to documents prepared for the Pennsylvania Public School Employees’ Retirement System. The firm’s BDC funds focus on the lower mid-market buyout segment in Western Europe. BDC III closed on £605 million in August 2016, per PEI data.

It’s even worse than we thought

The liquidators of Abraaj Group say disgraced CEO Arif Naqvi may have made up to $385 million in fraudulent or improper transfers, far exceeding the $250 million figure posited by prosecutors, Bloomberg reported. Naqvi and five other executives at the collapsed PE firm are facing securities fraud and money laundering charges brought by the US government, PEI reported last year. His hearing for extradition from the UK is set for 22-25 June.

They did the math

Luck or judgment? According to PE tech platform eFront, LBO funds are entering this crisis in better shape than the last one. Why? They have been calling capital at a much lower rate over the last couple of years (and so would have invested in fewer peak-price deals) compared with 2006 and 2007. Read Carmela Mendoza’s full report here.



Love or loathe him, Professor Ludovic Phalippou has stirred much debate around and interest in PE returns. He has now decided to step away from PE as a topic and, based on the content of his nightmares (per Twitter), it is probably not a moment too soon.

PE discount

The Financial Times reported last week (paywall) that KKR had asked its lawyers, accountants and advisors to “share in the economic pain” of the coronavirus disruption by giving the PE giant a 15 percent discount on work carried out by its professional advisors. KKR declined to comment on the story.

Opex award submissions

If you haven’t yet applied for our Operational Excellence Awards 2020, there’s still time. Here are all the details on how to submit your exited portfolio company for consideration by our expert judging panel. Closing date for entries is Wednesday, 1 July.

Dig deeper

Institution: California Public Employees’ Retirement System
Headquarters: Sacramento, United States
AUM: $389.69 billion
Allocation to alternatives: 20.67%

California Public Employees’ Retirement System has made $3.9 billion-worth of private equity commitments across six vehicles, according to its quarterly report for Q1 2020.

The commitments comprise of $400 million to Insight Ventures Partners XI, $1 billion each to OHA Black Bear Fund, Oaktree Latigo Investment Fund and Blackstone Core Equity Partners II, $200 million to CVC Capital Partners Asia V and $300 million to ASF VIII.

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

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

Subscribe now and get Side Letter delivered to your inbox each day

To find out how, email, or call our team:

London: +44 207 566 5432
New York: +1 646 545 6296
Hong Kong: +852 2153 3140