Side Letter: Tech headaches, Warburg secondaries, mega-fund LPs

LPs get headaches over China tech, mega-fund LPs revealed, Warburg Pincus eyes secondaries deal... again. Here’s today's brief, for our valued subscribers only.

Just happened

The future is now

Tech companies are all the rage, and nowhere more so than in China. Business owners want to tap this demand by introducing tech angles to their companies, creating a headache for LPs who could become overweighted to the TMT sector, Pantheon partner Jie Gong (pictured, left) told delegates at the HKVCA China Private Equity Summit in Hong Kong on Thursday. Firms spent $59 billion on Chinese tech last year, more than 20 times 2010 levels, according to Bain.

Placement agent promotions

Congratulations to former veteran LP Craig Lewis who has been admitted to the partnership at placement agent First Point Equity. Lewis, previously director of private markets and real assets at Alfred I duPont Testamentary Trust, joined the firm in 2017. First Point has also promoted two directors – Josh Dorfman and Simon Gold – to managing director.

CFOs of the world unite!

Private Funds CFO – one guess who that’s aimed at – launched this week. It features fresh daily content by email and major set-piece insight such as its cover story on how robots are changing private equity forever. Former Apollo Global Management controller Omar Hassan, now CFO at Cloverlay, says in the piece: “Robotics is taking operational efficiency to the next level.” We heard a lot of that too at the recent Operating Partners Forum in London. Find out more – along with weekly insight on investor reporting, outsourcing, cybersecurity, technology, finance and human capital – by visiting Private Funds CFO.


Warburg’s single-asset plans. Warburg Pincus is considering lifting security firm Allied Universal out of its 2012-vintage Fund XI and placing it in a separate vehicle backed by secondaries capital, per sister title Secondaries Investor. Single-asset deals tend to happen at the end of a fund’s life, making this one unusual. Equally striking is its potential size. In February, Canada’s CDPQ acquired a stake in Allied, valuing it at $7 billion. It’s understood that Warburg Pincus owns around one-third of the company, so this could be a whopper of a deal.

Mega-fund fans. Which LPs are committing to the industry’s biggest funds? As part of our PEI 300 coverage we dug into the five largest funds raised over the last five years – which hauled in a combined $95.3 billion – to reveal which LPs made hefty commitments to more than one of them. Spoiler alert: Hellman & Friedman wins the popularity contest.

Going Dutch. APG Asset Management, a unit of the Netherlands’ largest pension fund, has appointed a former MetLife director to lead its Asia-Pacific PE activity. Shirley Ma will serve as senior portfolio manager in Hong Kong. APG has a global PE portfolio of at least $25 billion.

Inside tip

Tomorrow and Thursday we’re at PEI’s Responsible Investment Forum Europe 2019 in London. Speakers from Harvard Management Company, the EBRD, AP6, PGGM, Wafra and more will be there. Attending the event? Get in touch.

Dig deeper

Buckeye breakdown. Ohio Police and Fire Pension Fund has approved $70 million of commitments, including $20 million to Trident VIII. Below is a breakdown of the $15.6 billion pension’s investment portfolio. For more information on Ohio Police and Fire, as well as more than 6,700 other institutions, check out the PEI database.

He said it

“If I have a good asset, I want to hold it forever.”

Mark Wiseman, chairman of BlackRock’s alternative investment unit, explains the strategy of the firm’s long-term private capital team to Institutional Investor.

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Today’s letter was prepared by Toby MitchenallIsobel MarkhamAdam LeRod JamesAlex LynnPreeti Singh and Adam Smallman.

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