Against all odds
We have some positive news to bring you from Ukraine this morning. Against the backdrop of a humanitarian crisis and ongoing war, Kyiv-headquartered Horizon Capital has gathered $125 million in a first close of its fourth vehicle targeting Ukraine and Moldova, per details shared with Private Equity International. Horizon Capital Growth Fund IV launched in October with a $250 million target and paused its capital-raising between the end of February and May. It now expects a final close by June next year.
LPs so far include the European Bank for Reconstruction and Development, the International Finance Corporation, Germany’s DEG, the Netherlands’ FMO, the Swiss Investment Fund for Emerging Markets, the Western NIS Enterprise Fund, and the The Rockefeller Foundation and the John D and Catherine T MacArthur Foundation‘s Zero Gap Fund. Every investor that participated in Fund IV’s first close were LPs in its 2017-vintage $200 million predecessor, founding partner and chief executive Lenna Koszarny, tells Side Letter. Like Fund III, the latest vehicle is “structured, raised and invested within the context of military conflict in southeastern Ukraine” and will back 10-15 tech and export-oriented companies with an average ticket size of $10 million-$30 million.
Beyond safety and security, Korszarny’s team is “leaving no stone unturned in supporting founders, portfolio companies, as well as leading numerous humanitarian initiatives to support communities and NGOs in Ukraine”. Since the war started, Horizon has raised over $3 million for its humanitarian logistic group initiative. The firm’s investment professionals remain in the region, with back-office staff performing fund administration outside Ukraine. That Horizon has remained active during this humanitarian crisis is a feat in itself; raising half of one’s fund target in such an environment even more so. Investors’ continued support in spite of these odds is testament to the resilience of Horizon and their outlook on Ukraine itself.
Calling all data enthusiasts!
PEI Group – parent company of the publisher of Side Letter – this morning unveiled the acquisition of Altman Inc and its FundFilter analytics platform and database. FundFilter holds institutional-quality performance data for more than 8,000 investment funds managed by 2,000-plus asset managers across multiple private market verticals including private equity, real estate, credit and infrastructure. It provides an array of tools to conduct fund performance comparisons, fund screening, benchmarking and cashflow forecasting/modelling. The data sets and analytics tools of FundFilter will become incorporated into PEI’s relevant subscriber intelligence products to enhance our already rich information sets covering funds, fund managers and investors.
Jean-Baptiste Wautier, partner and CIO for PE at European buyout firm BC Partners, will leave at the end of January after nearly two decades. Two other partners Christian Mogge, who covers the European business services sector, and Pascal Heberling, who covers the healthcare sector and DACH region, are also leaving towards the end of this year. The reshuffle was made earlier this year after closing its latest flagship below target, according to an investor letter seen by Side Letter. BC gathered €6.9 billion for its 11th flagship fund, having initially sought €8.5 billion.
“We are extremely grateful for the significant contribution that Jean-Baptiste, Chris and Pascal have made to the firm over the years and wish them well for the future,” the firm said. “BC Partners continues with an extremely strong and experienced group of partners and leaders with an average tenure of more than 14 years and a strong track record of growing our own.”
A source familiar with the matter said the executives are stepping down to pursue different opportunities, though it is unclear where they are headed next. Wautier will remain an adviser and his portfolio companies are already supported by another partner, it is understood. BC is “full-speed deploying” Fund XI, chairman and partner Raymond Svider, told PEI in February, with some $2.4 billion-worth of transactions across eight deals completed at that time. The firm plans to return with Fund XII in the second half of 2023, according to an investor letter seen by PEI earlier this year.
They did the match
Fossil fuels: heading for extinction?
New research sheds light on PE’s rising aversion to fossil fuels. Some 31 percent of PE firms have started to divest from fossil fuel-related investments, according to a survey by Auxadi of 100 fund management professionals, as reported by our colleagues at New Private Markets (registration required). The fund services provider found that 43 percent plan to begin the divestment process within the next year. Auxadi’s survey referred to divestment “with the goal of achieving net-zero targets”, a spokesperson for the company said. European managers (excluding the UK) are furthest advanced, with 50 percent of respondents having already started divesting; the figure for North American GPs stands at 26 percent, and 27 percent for UK respondents. None said their firm would “never” divest.
Triago’s new team
GP advisory Triago has formed a five-person team dedicated to primary directs in Europe, the Middle East and Africa, per a statement. The team will raise capital for transactions led by deal-by-deal sponsors (also known as fundless sponsors) from the likes of family offices and institutional investors. Such deals accounted for 17 percent of global fundraising, versus 13 percent the prior year, Triago estimates.
“Exceptional economic uncertainty connected to the pandemic, inflation, war in Ukraine and the prospect of recession is changing the way people invest in private equity,” said Triago founder Antoine Dréan. “Funds are still popular, but investing in individual companies, or in simultaneous mergers of just a few companies, all of which can be easily stress-tested, is even more popular.” Julian Becker, who joins as principal in the Paris office from Morgan Stanley, leads the team. At MS he was a vice-president in charge of all cash and derivative fixed income sales in Germany, Austria and Switzerland.
LP meetings. It’s Monday, so here are some LP meetings to watch out for this week.
- Kansas Public Employees Retirement System
- Tennessee Consolidated Retirement System
- Chicago Policemen’s Annuity & Benefits Fund
- Ohio Bureau of Workers’ Compensation
- Sonoma County Employees’ Retirement Association
- Louisiana State Employees’ Retirement System