Side Letter: Wellcome Trusts in VC, secondaries mega-sales, StepStone eyes HNWIs

Three global institutional investors including ADIA are eyeing secondaries sales that could total $10 billion – a sign that a mega-sales phase is upon us again. Here’s today's brief, for our valued subscribers only.

Just happened

Wellcome Trusts in VC

Venture capital has left many an LP bruised and bloodied, but the UK’s Wellcome Trust has figured out how to thrive in the asset class. Its venture portfolio reached £2.82 billion ($2.66 billion; €2.43 billion) last year, or 39 percent of the portfolio’s overall value, and has handily outperformed a standard VC benchmark and the S&P 500 for one-, three-, five- and 10-year returns. The road to VC success wasn’t easy. Head of VC Geoffrey Love (pictured) spoke to sister publication VCJ about the trials and tribulations he faced while building out Wellcome’s portfolio.

Secondaries mega-sales

There’s a tsunami building over in the secondaries market. This week sister publication Secondaries Investor reported on three LP portfolio sales that together could top $10 billion. Abu Dhabi Investment Authority is understood to be considering selling as much as $4 billion in fund stakes, while Korean SWF Korea Investment Corporation is shopping a $2.8 billion packageTeacher Retirement System of Texas is also understood to be working with an advisor on a sale that could hit $3 billion. With record amounts of dry powder helping keep prices high, LPs are filling their boots.

Hot on HNWIs

What do StepStone Group and Flowstone Partners have in common? Aside from the obvious, both firms are seeking to tap the HNW and mass affluent investors’ growing appetite for private equity. StepStone launched Conversus this week, a platform designed to offer private capital products via fund investments, secondaries and co-investments. It is unclear how much capital HNWIs need to invest in order to access Conversus or whether the team expects to bring any particular product to market. The news follows FlowStone’s launch of its debut vehicle for the strategy this month.


Growth funds, meet your newest LP. Fund of funds managers eyeing growth equity and late-stage venture investments in the UK have another LP to tap. British Business Investments, the commercial subsidiary of state-owned development institution British Business Bank, rolled out its managed funds programme last year and aims to deploy £500 million across five managers. We caught up with Vianney de Leudeville, director of investments for BBI, on how MFP will be deployed and its expected returns.

Taking (Impact) AIM at Indonesia. What does a Silicon Valley VC firm have in common with impact investing? This is a question Khailee Ng, managing partner of seed capital investor 500 Startups, asked himself when invited to discuss the strategy at New York’s UN building in 2017. Fast-forward to September 2019 and the firm has been selected to jointly launch ImpactAim Indonesia, an accelerator designed to help start-ups measure their impact, scale their business and connect with private equity impact investors. We caught up with Ng to discuss impact metrics, support for the strategy and why it’s Indonesia’s time to shine.

Dig deeper

Rise and shine. New Bedford Retirement System increased its private equity allocation to 8.46 percent in June 2019, bringing it closer to its 10 percent target. Here’s a breakdown of the $326 million US public pension’s total investment portfolio. For more information on New Bedford, as well as more than 5,900 other institutions, check out the PEI database.

He said it

“Business has been good since Brexit happened.”

Bruce FlattBrookfield Asset Management’s chief executive, tells Bloomberg that London is going to remain a centre of commerce.

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Today’s letter was prepared by Adam LeRod JamesCarmela MendozaAlex Lynn.

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