Just happened
Petershill highlights
Petershill Partners, the listed GP stakes vehicle operated by Goldman Sachs Asset Management, released its annual results yesterday. Here’s what you need to know:
- Petershill made three acquisitions in 2022, comprising a follow‐on investment of additional equity in Kayne Anderson Real Estate, plus two new firms in the Petershill IV private fund: mid-market shop LLR Partners and credit specialist SLR Capital Partners.
- This brings its total partner firms to 25 as of 31 December, up from 19 at the time of its 2021 IPO. Its partner firms represented $283 billion of combined AUM as of December, compared with $234 billion 12 months prior.
- Defying a tight fundraising environment, its partner firms recorded $60 billion of fee-eligible inflows last year, up from $21 billion the prior year.
- Its private markets portfolio had accrued $611 million of carried interest as of December. More than two-thirds (69 percent) of partner firm revenue comes from management fees; 26 percent from performance fees and 5 percent from investment income.
Keep an eye out for Private Equity International‘s comparison tool for the rapidly expanding universe of GP stakes firms.
Eurazeo goes it a-Rhône
Paris-based Eurazeo and New York’s Rhône Group are set to part ways after nearly five years of partnership. The duo have initiated a process to transfer the former’s 30 percent stake in the latter to “members of Rhône or otherwise”, with certain Rhône managing directors and other stakeholders informing Eurazeo they intend to sell their shares in Eurazeo, per a statement. Rhône co-founder Robert Agostinelli had also resigned from Eurazeo’s supervisory board effective 13 March.
Eurazeo’s 2017 acquisition of Rhône aimed to provide the former with access to US public pensions as part of a wider strategy to increase its third-party assets under management, Private Equity International reported at the time. The development follows the shock departure of Eurazeo chief executive Virginie Morgon, who oversaw the acquisition of Rhône as well as the firm’s expansion into the US, splitting her time between New York and Paris. At the heart of the matter appeared to be the Decaux family – which owns around 18 percent of Eurazeo – being unimpressed by Eurazeo’s flattish share price and with fundraising progress for its flagship Capital buyout strategy, Side Letter reported at the time.
Hoffmann in the (Hill)house
A long-term veteran of Permira has left the firm to join Asia’s Hillhouse Capital. Sebastian Hoffmann spent 19 years with the PE firm, first in Frankfurt and, most recently, as a principal in Hong Kong. He joins Hillhouse as a managing director, according to his LinkedIn profile. Hoffmann focused on investment opportunities in the healthcare sector across Asia-Pacific and worked on numerous transactions including I-MED, Hugo Boss & Valentino and SBS Broadcasting, according to a cached version of Permira’s website. Permira declined to comment on his departure.
Permira’s most recent deal in Asia was the 2021 acquisition of South Korean food delivery business Yogiyo as part of a consortium involving Affinity Equity Partners. The firm last year named Alex Emery, who served as head of Asia from 2011, as Asia chairman and Daniel Tan, who had been with the firm in Hong Kong since 2015, as head of Asia in Singapore.
Essentials
Sustainable growth
At a time when Asia-Pacific fundraising is challenging, managers are likely seeking ways to appeal to new and existing sources of LP capital. Sustainability may be one of them. According to the Sustainable Asset Management in Asia report from Mayer Brown and Sedgwick Richardson this morning, over 60 percent of asset managers in Asia-Pacific said fundraising was the area of their business that had most benefited from their approach to sustainability.
There is, however, room to improve. The Sustainable Private Equity in Asia Report, published in tandem with the prior report, found that while almost one-third (31 percent) of APAC PE firms have some form of a sustainability strategy addressing topics other than the firm’s overall approach to responsible investing, only 15 percent boast more advanced sustainability strategies that address multiple topics in a unified manner. What’s more, only 9 percent of managers have made sustainability a part of their branding.
Instead of taking a reactive approach, where firms disclose their ESG approach upon LPs’ requests, the report suggests managers actively engage investors about their sustainability goals. “We think it’s an opportunity for asset managers to stand out by being proactive, reaching out to their investors and using sustainability as a tool for engagement with what is arguably their most important stakeholder group,” Alexander Burdulia, associate sustainability director at Sedgwick Richardson, tells Side Letter.
Two-fifths (42 percent) of GPs said greenwashing fears prevented them from developing sustainability strategies. “One of the barriers that we hear about often is the lack of capacities or dedicated knowledge in developing and delivering sustainability strategies,” Burdulia notes. “Without the tailored knowledge and understanding of sustainability, you’re obviously running the risk of greenwashing.” Unsurprisingly, challenges around obtaining relevant data was identified as the pressing obstacle, at 65 percent. Tensions over ESG data collection are rising in private markets, as we noted yesterday.
Hunter strikes again
Hunter Point Capital has acquired its third GP stake in the space of a month. Coller Capital, one of the last remaining independent secondaries firms of size, has sold a passive minority stake to the US firm, according to a statement. Our colleagues at Secondaries Investor have the details (registration required).
All proceeds from the transaction will be reinvested into Coller funds, though it is unclear whether this refers to Coller’s GP commitment and a spokesperson declined to comment. The investment “aims to support Coller’s long-term growth”, according to the statement, which noted the transaction “builds on the success of Coller’s market-leading credit secondaries business and its latest innovative RMB fund, as well as accelerating the expansion of its reach in the private wealth market”.
This is the latest in a string of deals for Hunter Point, which last week acquired a minority stake in UK mid-market firm Inflexion Private Equity, two weeks after investing in L Catterton.
Dig deeper
Institution: New Mexico State Investment Council
Headquarters: Santa Fe, US
AUM: $42.5 billion
Allocation to private equity: 8.67%
NMSIC approved several new commitments to private equity funds during its 28 March board meeting. These include $300 million to Ares Pathfinder Fund II, $62.5 million to Lux Ventures VIII, $20 million to Goodwater Capital V and $5 million to Goodwater Infinity III.
NMSIC had a 8.67 percent exposure to private equity as of 31 January Alternative investments constitute 18 percent of the institution’s entire portfolio.
For more information on New Mexico State Investment Council, as well as more than 5,900 other institutions, check out the PEI database.
Today’s letter was prepared by Alex Lynn with Madeleine Farman and Katrina Lau.
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