Side Letter: Partners Group’s $6bn + $9bn; Motive’s chairman; Neuberger’s NAV

Partners Group has closed one of this year's largest private equity programmes. Plus: A look inside Neuberger Berman's listed PE vehicle and fintech specialist Motive Partners has named a chairman. Here's today's brief, for our valued subscribers only.

They said it

“We do believe in playing fair. We are not supportive of extremely creative, abusive tax planning”

Wai Leng LeongCDPQ‘s managing director for Asia-Pacific, told delegates at PEI Media’s Responsible Investment Forum: APAC Investor Day last week that the pension feels strongly about GPs taking advantage of tax loopholes. Details on New Private Markets (registration or subscription required).

Just happened

Partners Group’s directs raise
Partners Group has collected $15 billion for its fourth private equity buyout programme, per a Tuesday statement. The programme is anchored by the firm’s fourth flagship direct equity fund, which raised $6 billion, and includes an additional $9 billion from vehicles including separate accounts and mandates. It has already committed to 17 companies, including US veterinary hospital operator Blue River Petcare, Portuguese crop nutrition manufacturer Rovensa and Indian logistics provider Ecom Express.

Partners Group’s third flagship buyout fund, Partners Group Direct Equity 2016, raised €3 billion, according to Private Equity International data. That fund has delivered a 22 percent net IRR and 1.95x net TVPI, the statement said, noting that commitments from existing investors to the latest vehicle exceeded the total size of its predecessor.

Collectively, Partners Group’s $15 billion is among the largest PE funds to close this year, along with KKR Asian Fund IV, and the second-largest raised by a Europe-headquartered firm, behind the €15.6 billion EQT IX.

Motive’s new chairman
Fintech-focused Motive Partners has appointed Jeffery Yabuki to lead Motive alongside founder and managing partner Rob Heyvaert, per a statement seen by Side Letter. Yabuki, who joins with the titles of chairman and founding partner (the latter is understood to be given to select senior members of the firm), is the former chairman and chief executive of US-based financial services technology company Fiserv. His appointment follows Apollo Global Management’s purchase of a minority stake in Motive in July. The firm is seeking up to $1.5 billion for its sophomore fund, PEI reported last year.

Neuberger’s numbers
Neuberger Berman Private Equity, the $1.3 billion listed private equity investment company, on Monday said it had a 29.7 percent total return to net asset value for the year through 31 August. A record level of realisations against a market backdrop of high valuations and frenzied deal activity drove performance. Here are the key figures to know:

  • The listed vehicle reaped $300 million of realisations from the full or partial sale of 10 portfolio companies at a 3.3x multiple to cost.
  • NBPE has invested $40 million in four companies so far this year, including Ironsource ($15 million) and RealPage ($12 million).
  • It expects to close an additional three deals worth $63 million in consumer, software and industrials by year-end.
  • The aggregate EV/EBITDA multiple for portfolio companies valued on a trailing LTM basis was 15.2x as of 30 June.
  • The weighted average holding period for the realisations was 3.3 years.

Essentials

Mnuchin strikes gold
Steve Mnuchin, the former Goldman Sachs executive and hedge fund manager who served as US Treasury secretary during the Trump administration, has raised $2.5 billion for his debut PE fund, Bloomberg reports. Most of the capital raised by his firm, Liberty Strategic, was committed by sovereign wealth funds in the Middle East, including Saudi Arabia’s Public Investment Fund. The vehicle will back technology, financial services and content businesses.

SWEN interests align
The team behind a relatively small impact fund are taking a leading position on aligning it with impact. France’s Swen Capital Partners’ Blue Ocean fund will link 50 percent of its carried interest to the fulfilment of impact goals, managing director Christian Lim told affiliate title New Private Markets last week (registration or subscription required). The firm disclosed the fund’s launch in early September and secured a €52 million first close against a €120 million target. If you think that’s bold: next time it is likely to link 100 percent of the firm’s carried interest with impact targets, Lim said.

Dig deeper

Institution: California Public Employees’ Retirement System
Headquarters: Sacramento, US
AUM: $490.18 billion
Allocation to alternatives: 21.6%

The California Public Employees’ Retirement System has approved $5.1 billion-worth of commitments to 18 private equity funds, according to a document from its September investment committee meeting.

The commitments include $1.4 billion to Berkeley Street Strategic Solutions, $600 million to KKR North America Fund XIII and $500 million to Trident IX.

The US’s largest public pension has an 8 percent target allocation to private equity that stands at 8.3 percent.

CalPERS devotes 21.6 percent of its full investment portfolio to alternative assets. The pension has a strong appetite for diversified funds that are North America-focused.

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 Alex Lynn with Carmela Mendoza and Michael Baruch