Private Equity News & Analysis

Side Letter: Rede’s impact whitepaper; Barclays’ Moonfare hire; L Catterton’s GP stake sale

A sneak preview of Rede's latest LP survey. Plus: Barclays Private Bank has tapped Moonfare for its private markets team and L Catterton has parted with a GP stake. Here’s today's brief, for our valued subscribers only.

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Just happened

Business person watering money tree

Rede all about it
Side Letter has gotten its hands on an advance copy of the new Private Markets Sustainability and Impact Report from global placement firm Rede Partners. The report surveyed more than 160 institutional LPs last year about their appetite and preferences for impact investing. Private Equity International will have more detailed coverage on the report later today. In the meantime, here are some key findings:

  • Globally, sustainability & impact is the top sectoral priority for increased LP allocations after healthcare for 2023, above tech and industrials. For Europeans LPs, it is the number one priority; for North Americans, it is the least important.
  • Despite this, North America is expected to be the top focus of impact allocations, closely followed by Europe.
  • More than half (55 percent) of LPs that have previously backed impact funds will allocate more to the strategy over the next 12 months.
  • When assessing impact opportunities, one fifth of LPs require impact funds to outperform their generalist peers.
  • Climate change mitigation is the top impact priority for LPs, followed by healthcare and food & agriculture.
  • Just over one third (34 percent) want impact linked to carried interest, while 8 percent actively oppose this idea.

One giant leap for Chattopadhyay
Sweta Chattopadhyay, the former head of investments in Europe at digital fundraising platform Moonfare, has joined Barclays Private Bank as director of private markets, according to a LinkedIn post. BPB offers private wealth services such as succession planning and philanthropy to high-net-worth clients with investment portfolios of at least £5 million ($6.1 million; €5.7 million). Private Equity International reported in February that Chattopadhyay would be leaving Moonfare after roughly three years for new role in the private bank arm of a then-unconfirmed UK-based multinational bank in early March.

A spokesperson from Barclays confirmed Chattopadhyay’s appointment, noting that she reports to head of private markets Shenal Kakad. Chattopadhyay joined Moonfare in 2020 from LP advisory firm bfinance, where she was head of private equity. Prior to that, she worked on the investment team of UK Railways Pension Scheme Railpen.

PAG’s progress
Pan-Asian buyout giant PAG had raised at least $2.4 billion for its latest flagship fund as of 21 March, per two filings with the US Securities and Exchange Commission. PAG Asia IV launched in October 2021 with a $9 billion target, according to PEI data. Its 2018-vintage predecessor raised $6.1 billion from the likes of the California Public Employees’ Retirement System, CPP Investments and Washington State Investment Board. PAG declined to comment.

Asia-Pacific fundraising declined last year amid geopolitical tensions and travel disruption in China, the region’s largest private equity market. Funds targeting APAC PE collected $64 billion over the period, down from $105.2 billion in 2021. The region accounted for just 9 percent of total capital raised for the asset class last year, the lowest proportion since 2009.

Essentials

L Catt’s stake sale

Consumer giant L Catterton has sold a passive minority stake in the firm to GP stakes investor Hunter Point Capital, according to a statement. L Catterton will use the capital to focus on the growth of its myriad new fund platforms, including an impact platform, yuan-denominated strategy and private credit. Hunter Point Capital will support the development of the fund platforms, with a particular focus on the credit business, the statement said. Hunter Point’s co-founder and executive chairman Bennett Goodman, who co-founded legacy GSO Capital Partners, now Blackstone Credit, will serve as a strategic credit adviser to L Catterton.

“We are accelerating our newly launched private credit platform, building on our reputation as the partner of choice for consumer businesses around the world,” Michael Chu, global co-chief of L Catterton, said in a statement. “With his deep expertise in private credit markets, we’re delighted to have the support of Bennett as strategic credit adviser as we position the private credit platform for growth and continued success.”

ESG: the state of play

Private equity funds are beating their peers in private credit, growth equity and venture capital when it comes to ESG, according to a recent survey by investment advisory Malk Partners. Here are a few notable takeaways:

  • Almost all (98 percent) GPs said ESG integration in investments is backed by LP demand.
  • All PE investors consider ESG during their investments, versus 86 percent of growth and venture funds do, and 64 percent for credit funds.
  • Only 11 percent of credit funds monitor the ESG issues at their portfolio companies, compared with 84 percent of PE funds.
  • On diversity, equity and inclusion, GPs are also tracking diversity in portfolio companies, with gender and race being the most monitored criteria.
  • Though one fifth of mid-market PE firms take executive pay at portfolio companies into consideration when measuring ESG performance, none of the lower-mid market firms do.
  • On climate change, only 18 percent of firms have committed to net-zero emissions.

Dig deeper

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

27  March

28 March

29 March

30 March

31 March

Today’s letter was prepared by Alex Lynn with Adam Le, Carmela Mendoza, Helen de Beer, Madeleine Farman and Katrina Lau.