Rising to the challenge
It’s full steam ahead with fundraising for TPG’s second Rise Fund, targeting $3.5 billion, despite the departure of founder Bill McGlashan. It will undoubtedly be a tougher road.
Investor sources tell us the LP community will have questions for TPG, particularly around governance structures, and a fair few will likely wait to see whether their peers make commitments before they take the leap.
It’s tough to fault TPG for how it has handled the situation so far: not only was it swift to remove McGlashan and reassure investors, it smartly offered those LPs that committed to Fund II prior to February’s first close the chance to reaffirm their commitments.
Meanwhile, McGlashan and TPG clashed on Friday as to which party severed the ties, with TPG saying McGlashan was “terminated for cause” and McGlashan saying he had handed in his resignation prior to the termination. The Financial Times reports (paywall) it has seen an email chain between the two that supports McGlashan’s version of events.
Get thee to Berlin
If you have even a passing interest in infrastructure, you should hot-foot it to Berlin this week for sister title Infrastructure Investor’s Global Summit, where more than 2,000 of the industry’s finest will be gathering for a four-day climate-neutral infra extravaganza. If you need any more persuading, 500-plus institutional investors will be in attendance representing more than $1 trillion of infra capital. Check out this column from II’s senior editor Bruno Alves on what to expect at the event – and if you are in town, drop him a line: firstname.lastname@example.org
Yale’s alternative path. How does Yale consistently outperform its peers? By having a heftier-than-average allocation to alternatives, of course. In the last 10 years, private markets have helped the $29.4 billion endowment add $6.5 billion in value, according to Chief Investment Officer. Yale’s allocation of 14.1 percent to leveraged buyouts is way ahead of the educational institutional mean of 6.1 percent, while its allocations to real estate and venture capital are three times the educational institution mean, CIO writes.
Banks. Who needs ’em? Credit giants’ ability to write ever-larger tickets is increasingly muscling banks out of buyouts. Take Blackstone’s GSO Capital Partners’ offer of a €1.5 billion unitranche loan to back Advent International’s acquisition of Evonik’s acrylic sheets business, which – had Advent accepted – would have been the largest private debt deal to date. Even though it didn’t go through, it’s still significant, Private Debt Investor’s senior editor Andy Thomson writes, because it shows that private debt has more than come into its own: some firms could rival the syndicated loan market, which may benefit private equity sponsors when capital markets could otherwise be closed.
Is Asia’s PE party nearly over? Dark clouds loom for Asia-Pacific private equity, says Bain & Company. While Asia has been unstoppable in recent years (and now has about $883 billion in total AUM, about a quarter of the global private market), several developments – macroeconomic headwinds, China’s slowdown – are signalling change. A burgeoning winner-take-all dynamic is making it tougher for smaller, lesser-known funds to survive.
LP meetings. Watch out for…
- 18 March – Orange County Employees Retirement System is holding a regular board meeting.
- 19 March – Maryland State Retirement and Pension System is holding a board meeting.
- 20 March – Illinois State Board of Investment is holding a board meeting; New York City Employees’ Retirement System is holding a common investment meeting; State Teachers Retirement System of Ohio is holding a committees and board meeting; and Fresno County Employees Retirement Association is holding a board meeting.
- 21 March – Louisiana State Employees’ Retirement System is holding a committees and board meeting; District of Columbia Retirement Board is holding a board meeting; and Illinois Municipal Retirement Fund is holding an investment committee meeting.
- 22 March – North Dakota Retirement and Investment Office is holding an investment committee meeting
Abraaj’s collapse will not leave the industry’s collective memory for quite some time. What this means for the employability of its alums varies greatly depending on their role. Look out for our opinion piece exploring what could come next for Abraaj’s senior personnel soon. Any thoughts? Email email@example.com.
He said it
“My snarky remark would be: remember next time someone comes up here, criticises us for paying a lot of fees to private equity managers or criticises us for not indexing – we would be billions of dollars worse off as a state, we would be billions of dollars worse off as a fund were we to follow that type of advice.”
At an investment committee meeting, Oregon Investment Council CIO John Skjervem defends private equity fees.
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