Side Letter: TPG’s Rise II progress, circumspect Apollo LPs, growing up in Myanmar

Today: TPG's second Rise Fund is moving forward; some investors are reportedly standing back from Apollo while the Black-Epstein connection is cleared up; and emerging markets insight. Here's today's brief, for our valued subscribers only. 

They said it

“As long as you believe we’re going to be in a low-interest environment for the foreseeable future, which we and I think most people on this call would happen to believe, then I think you’re going to see this stay for some time”

Apollo co-president Scott Kleinman on the rise of SPACs at the Milken Conference. Register with Buyouts to read more.

Just happened

Rise: up

TPG has gathered $2.17 billion towards its second impact vehicle, The Rise Fund II, according to a filing with the US Securities and Exchange Commission. The firm started marketing the fund back in 2018 with a $3 billion target, but the process was thrown off track when the fund’s co-founder Bill McGlashan was dismissed in the wake of the 2019 college admissions scandal. It is now targeting $2.5 billion.

At private equity’s frontier

Myanmar’s nascent – but growing – private equity players face an uphill battle in convincing local businesses to accept foreign capital. Delta Capital Partners, the country’s largest private equity manager, hopes to find willing recipients among the market’s younger companies, which typically come with fewer legacy issues related to Myanmar’s chequered business history, managing partner Nick Powell tells Private Equity International as part of our upcoming emerging markets special report. The Yangon-headquartered firm will seek $100 million for its third fund – most of which is expected to come from DFIs – and is looking to write heftier cheques this time around. If the fundraising process is anything like its predecessor, Powell notes, the going could be a slog.

NAV loans the answer for EM managers?

Emerging markets GPs are particularly well-suited to making use of NAV lending facilities where hold periods tend to be longer and the secondaries market for LPs trading their stakes is less developed, write lawyers from Akin Gump in this guest piece. Some good news: pricing for such loans is likely to drop as the universe of lenders grows and their familiarity with the underlying assets increases.


Pausing on Apollo

The Pennsylvania Public School Employees’ Retirement System has told Apollo Global Management it will not be considering any new investments with the firm following an article in the New York Times that detailed some personal and financial connections between the firm’s founder Leon Black and Jeffrey Epstein, the Financial Times is reporting (paywall). PSERS told the FT it was “closely following the ongoing legal issues and the newly launched internal Apollo investigation”. The report also notes Finnish pension fund Keva and two UK local authority pension funds have raised concerns about Black’s relationship with Epstein and are seeking further information.

Banking on relationships

Charlesbank Capital Partners is hitting the market with its 10th flagship fund and is expected to have a relatively smooth path to a final close, investors tell sister publication Buyouts. It is targeting $3.25 billion but could raise up to $4 billion. The 2017 predecessor fund was $2.75 billion.

Dig deeper

Institution: Texas County and District Retirement System
Headquarters: Austin, US
AUM: $29.06 billion
Allocation to alternatives: 46.7%

Texas County and District Retirement System has agreed to commit $95 million to Khosla Ventures VII and $30 million to Khosla Ventures Seed E, according to the pension’s recent investment activity report.

The $29.06 billion US public pension has a 20 percent target allocation to private equity that currently stands at 19.4 percent.

For more information on TCDRS, 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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