Side Letter: Riverside’s reins, a slice of Oak for AlpInvest, secret impact

When it comes to sovereigns investing in tech, the Singaporeans have led the way; others have followed. Here’s today's brief, for our valued subscribers only.

Just happened

Riverside updates its Karst

Mid-market firm The Riverside Company has handed the reins of its European business to Karsten Langer (pictured), who succeeds managing partner Antonio Cabral, as it kicks off fundraising for its sixth European fund, PEI has learned. The fund is targeting €600 million, its largest yet, according to communications sent by the firm to investors seen by PEI. Once Langer takes over, Cabral’s title will switch from managing partner to founding partner and he’ll remain a senior member of Riverside Europe Funds’ investment committee.

Don’t mention the i-word 

The “impact investor” label, which has been eagerly adopted by firms of various hues, is not always helpful, says Dave Chen, principal and chairman of sustainability-focused real assets firm Equilibrium Capital. “When we talk to a pension plan like CalSTRS, we generally don’t talk about impact investing,” he said at the Credit Suisse Asian Investment Forum in Hong Kong. “In some ways you shouldn’t talk about impact investing; you should get back to the fundamentals of what’s going on in the industry.”

A slice of Oak for AlpInvest

Another day, another GP-led secondaries deal by a brand-name manager. This time AlpInvest is set to back the restructuring of Oaktree Capital Management’s 2009-vintage Principal Fund V, a deal run by Evercore, sister title Secondaries Investor has reported. This came a day after SI revealed Ares Management was mulling something similar for ACOF III, its 2008-vintage buyout fund. As well as being potentially a big one – Fund V had $1.3 billion of remaining NAV as of 31 December – it is a rare process involving a special sits fund.

Essentials

What the money wants. Speaking of Oaktree, the Brookfield-Oaktree transaction will allow both managers to take further advantage of LPs’ desire to commit greater sums to fewer managers, writes sister title PERE’s senior editor Jonathan Brasse: “Like Blackstone, ‘Brook-tree’ now has credible vehicle series, track records in tow, in all the major private market food groups to offer their merged investor pools – a step towards being a one-stop shop in the broadest sense.” What’s more, consolidation in private markets will likely stabilise profits, beneficial to LPs and shareholders alike.

This Dyal goes up to 20. Neuberger Berman’s GP interest unit Dyal Capital Partners has acquired a minority position in US mid-market firm HGGC. The deal marks Dyal’s 20th private equity target and its fifth tech-related investment, according to its website. Dyal’s portfolio also includes tech giant Silver Lake, software investor Vista and tech specialist Vector.

Appetites for GP interests are “disproportionately large”, according to Coller Capital, but questions remain over how – or whether – these deals will be exited. Industry sources point to the public markets as a likely destination, but whether this would be through individual IPOs or listing Dyal’s funds as trusts is yet to be seen.

Leading the sovereign fund pack. Singaporean investors GIC and Temasek Holdings are top dogs when it comes to tech investing, according to Sovereign Wealth Funds 2018, a report by IE University and ICEX-Invest in Spain. And where the leaders go, the rest follow: since the Singaporeans ramped up their tech teams, set up offices in Silicon Valley and China, and explored earlier stages of investments – think biotech, mobility and AI back in 2014 – SWFs like Australia’s Future Fund, Malaysia’s Khazanah Nasional, the UAE’s Mubadala Investment Company and Ireland’s Strategic Investment Fund have followed, the report noted. Sovereigns participated in 220 VC rounds between 2014 and 2018; from 2009 to 2013 that figure was just 14.

Dig deeper

Want more data? There are more than 6,700 institutions in our database, including RiversideAlpInvest and Oaktree from today’s Side Letter.

She said it

“If you tell us this is what you do, you have to be disciplined about that.”

Texas TRS‘s senior director of energy, natural resources and infrastructure Carolyn Hansard tells sister title Infrastructure Investor managers need to stick to the script they sell.


We would love your feedback to help us make this newsletter more useful; click here to give us your opinion.

Today’s letter was prepared by Toby MitchenallIsobel MarkhamRod JamesCarmela Mendoza and Alex Lynn.


Subscribe now and get Side Letter delivered to your inbox each day

To find out how, email peisubs@peimedia.com, or call our team:

London: +44 207 566 5432
New York: +1 646 545 6296
Hong Kong: +852 2153 3140