Side Letter: Petershill’s IPO; UK’s club scene; Asia Alts’ target

Liquidity on the horizon for investors in one of Goldman Sachs' Petershill vehicles. Plus: Firms are teaming up to make larger bets in the UK and how an Asian fund of funds plans to deploy its capital. Here's today's brief, for our valued subscribers only.

They said it

“If you take China as a corporation, the… problems the company has been facing in the past 40 years, versus the challenges it’s facing for the next 40 years are very different. It’s a paradigm shift; what it really requires is new thinking.”

Bao Fan, founder of Chinese investment bank and PE firm China Renaissance, tells Bloomberg the business is increasing its focus on companies in healthcare, consumer brands and enterprise technology.

Just happened

Petershill goes public?
A common sticking point for LPs considering GP stakes funds is the lack of an obvious path to liquidity. Goldman‘s Petershill unit has a solution: the firm is considering listing a permanent capital vehicle in London as early as this year, according to BloombergThe move would enable a new pool of investors to gain exposure to its funds, while offering existing LPs a chance to cash out.

Petershill – one of the strategy’s more secretive investors – owns stakes in firms including mid-market firm Harvest Partners, tech specialist Accel-KKR and venture capital firm General Catalyst, as PEI detailed in 2019.

This isn’t the first time Petershill will have freed up cash for its investors. The unit is understood to have returned capital to LPs in its Petershill II fund via a $350 million securitisation in 2019. The solution is a popular one, with Dyal Capital Partners also running a similar process last year. You can read more about how it worked here.

Asia Alts’ target
San Francisco’s Asia Alternatives is seeking $1.3 billion for its next fund of funds, PEI reports this morning. Here’s what you need to know:

  • AACP VI would back 20-25 fund managers across Asia-Pacific, with roughly half of the money to be deployed in Greater China.
  • About 90 percent of the capital will back independent Asian GPs, with the remainder allocated to firms affiliated with US or European entities.
  • Between 20-30 percent will anchor emerging funds launched by groups that have previously worked together, and a similar proportion will direct co-investments and secondaries.
  • There may well be fewer funds for it to choose from, with Asia-Pacific PE fundraising having declined for two years on the trot from its 2018 peak amid a flight to larger, brand-name firms.

Axcel’s not-so hard-cap
Copenhagen-headquartered Axcel Management has closed Fund VI above its €800 million hard-cap, PEI reported overnight. The Nordic-focused firm raised €810 million for its sixth vehicle, of which around 65 percent came from existing LPs, including the European Investment Fund. Nearly 70 percent of its LP base are Nordic, which the firm intends to diversify among US and Asian investors next time it hits the road. Details here.

Essentials

Joining the club
PE firms are making enormous bets on the UK during the pandemic, with a growing number teaming up to complete deals typically outside their capacity or risk appetite. The value of UK club deals rose 28 percent to £10.3 billion ($14.1 billion; €12.1 billion) in the year to end-June, according to law firm Mayer Brown. Club deal count also increased to 50 from 38 last year. Notable examples in 2021 include the £6.8 billion acquisition of supermarket chain Asda by the Issa brothers and TDR Capital, and Cinven and GIC’s £680 million purchase of insurance broker Miller Insurance Services.

Golding’s new Beat
German fund of funds manager Golding Capital Partners has opened an office in Zurich, per a statement. Beat Frühauf, previously head of THEAM Quant Funds at BNP Paribas Schweiz, joined Golding at the beginning of the month to lead the new outpost as managing director. The firm is scaling up its presence in the country to meet investor demand for infra and private debt.

Dig deeper

Institution: Cathay Life Insurance
Headquarters: Taipei, Taiwan
AUM: NT$6.97 trillion

Cathay Life Insurance has committed $600 million each into Blackstone Strategic Partners’ Strategic Partners Fund IX and Lexington Partners’ Lexington Capital Partners X, according to a stock exchange filing.

The Taiwanese insurer’s recent private equity commitments have been to secondaries and venture capital vehicles across diversified sectors in North America and Western Europe.

For more information on Cathay Life Insurance, 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.