Side Letter: The next Abraaj chapter, Asante’s hired Gunn, Ares $3.5bn, an Oxford debate

The Abraaj saga continues and the next chapter is either exciting or terrifying depending who you are. Plus: another advisor for Asante, a new podcast for you and plenty more. Here's today's brief, for our valued subscribers only. 

They said it

“A 5- or 10-percentage-point cut in the capital-gains tax would encourage investors to inject funds into ailing businesses. For Congress, that would be a better investment than another $2.5 trillion in aid.”

Mohamed Desoky, associate dean of academic programs at the Skema Business School, argues in a Wall Street Journal opinion piece (paywall) that private equity investment should be unleashed as an antidote to the current economic crisis.

Just happened

The post-Abraaj clean-up

While some former senior Abraaj Group execs are facing criminal charges and extradition, others are faring better. Ahmed Badreldin (pictured) has been running the firm’s former North Africa team and portfolio, and now has his sights set on completing that unit’s rebirth with a fundraise this year. Riyada Managers BV, which formally cut ties from Abraaj last year, will seek around $300 million for RMBV Fund III, PEI has learned.

Meanwhile, Sev Vettivetpillai, a former member of Abraaj’s global investment committee, is co-operating with the US government and is expected to plead guilty to some charges, the Wall Street Journal reports (paywall). He becomes the second senior executive to do so after Mustafa Abdel-Wadood pleaded guilty to charges of racketeering, securities fraud and wire fraud in June last year. The extradition trial of former Abraaj CEO Arif Naqvi began yesterday. He is charged with misappropriating more than $380 million of investor money amid what became the most spectacular collapse of the private equity industry’s short history.

Hired Gunn

SL Capital Partners’ founding partner Graeme Gunn has been busy as a senior advisor with Asante Capital Group, PEI has learned. Gunn, known in European PE circles for his work with SL’s listed trust (and latterly for the length of his beard), has been helping the placement agent build a secondaries advisory business since the start of 2020. The team is now 10-strong with the appointment yesterday of Yaron Zafir, former head of secondaries at Rede Partners.

Listen in

We have a new podcast out: 16-minutes of discussion on our latest LPs survey about life in lockdown (survey available here). On the agenda: remote AGMs, appetite for distress and the appropriate use of state support.


iCapital, therefore I buy

iCapital Network is continuing its acquisition spree, agreeing to acquire Wells Fargo Investment Institute’s Global Alternative Investments Feeder Fund Platform. Wells Fargo is also making a strategic investment into iCapital. WFII’s David Cronk tells us the deal reinforces the growth the bank expects to see in this part of their business. Since 2016 iCapital has bought or taken over oversight of four other bank feeder fund platforms.

Opportunity knocks

Ares Management has closed on more than $3.5 billion for its special opportunities fund, 75 percent above its initial $2 billion target. Ares Special Opportunities Fund is the manager’s first distressed vehicle launched since January 2017, when the firm hired Scott Graves from Oaktree Capital Management to develop the Ares Private Equity Group’s special opportunities platform.

PE performance throwdown

Private equity’s professorial bête noire can’t quite leave the scene: reactions to his final paper on PE performance prompted Ludovic Phalippou to call for one last intellectual showdown by way of LinkedIn:

“Last week has been eventful. Saw and received hate messages, messages saying my work is flawed, wrong, biased… So, here is the deal: Oxford Debate on PE performance and Fees, June 30th, 2pm, UK time, live streaming FB/LinkedIn. Apply to be in the opposition, right here. Don’t be shy:”

Dig deeper

Institution: San Francisco Employees’ Retirement System
Headquarters: San Francisco, United States
AUM: $25.7 billion
Allocation to alternatives: 26.5%

San Francisco Employees’ Retirement System announced commitments of $55 million to MGG SF Evergreen Unlevered Fund 2020, $50 million to Thoma Bravo Fund XIV, $25 million to Thoma Bravo Explorer, $75 million to Thoma Bravo Discover Fund III and $62 million to Livingbridge 7.

The $25.7 billion US public pension has an 18 percent target allocation to private equity that currently stands at 21.8 percent.

For more information on SFERS, as well as more than 5,900 other institutions, check out the PEI database.

Today’s letter was prepared by Toby Mitchenall with Isobel Markham, Adam Le, Rod James, Carmela Mendoza and Alex Lynn.

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