Side Letter: PEI Awards 2020; moral secondaries sales; PE to les masses

Secured a 7x exit despite the pandemic? Raised a fund in record time amid global travel restrictions? Tell us who to shortlist in our latest annual awards, which launched Friday. Here's today's brief, for our valued subscribers only.

He said it

“Illiquidity, just intellectually, doesn’t fit into the minds of the 401(k) community. And the vast majority of litigation is over fees”

Doug Keller, head of private wealth and defined contributions at Pantheon, limits expectations over immediate retail participation in private equity.

Just happened

Awards launch
It’s that time of year again – send us your highlights for the Private Equity International Awards 2020! We know this year has been like no other, so it’s more important than ever to celebrate the successes and champion those firms that are going above and beyond for their investors, stakeholders and communities. We’re accepting submissions until 13 November. Find all the details on categories and the submissions process here.

Love the fund; can’t stomach the manager
LPs who choose to sever ties with Apollo Global Management and Vista Equity Partners in light of recent events should have no problem doing it on the secondaries market, writes sister title Secondaries Investor‘s Rod James (subscription required). Sales driven by ethical concerns do occur occasionally and – provided the assets themselves are environmental, social and governance-compliant – can fetch full prices. The question is whether the GPs themselves will facilitate a process for LPs to sell in order to gain some control over who comes into the fund.

“[Robert Smith and Leon Black] could easily buy their funds back from the LPs at par,” says one New York-headquartered market source. “They are generally the biggest individual investors in every one of those funds anyway. Endowments and pensions have the ethical focus but friends, family and members of the firm – they might not mind as much.”

Liberté, égalité, fraternité and private equity
You may have missed it but at the end of the summer France’s state-backed investment bank Bpifrance said it had moved a 5 percent slice of its private equity assets into a fund and was inviting members of the public to buy exposure to it. The vehicle contains exposure to around 1,500 mainly French companies held in around 145 funds and managed by about 80 GPs. What’s innovative about the structure is that pricing was set by institutional buyers coming in on a secondaries basis, and then a mirrored version of the same assets were then offered to retail buyers with a minimum buy-in of €5,000. “It’s purely in the spirit of sharing, of giving access to private equity assets to the French,” says Mathieu Dréan, managing partner at Triago, which advised on the deal. Égalité indeed.


More PE please
State of Wisconsin Investment Board is considering increasing its private equity and private debt target to 11 percent from 9 percent by the end of 2021, sister title Buyouts reports (subscription required). This would depend on the pace of capital calls and what happens in the public markets, said Chris Levell, partner at NEPC, Wisconsin’s investment consultant, at SWIB’s board meeting on 20 October. Wisconsin made $1.06 billion of private equity and private debt commitments as of Q2, including $250 million to CVC Capital Partners VIII, $200 million to GSO Capital Opportunities Fund IV and €100 million EQT IX, according to PEI data.

Dig deeper

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

27 October

28 October

29 October

30 October

Today’s letter was prepared by Toby Mitchenall with Isobel MarkhamAdam LeRod James and Carmela Mendoza.

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