Twin Bridge Capital Partners – a Chicago-based fund of funds that has traditionally been backed by one anchor investor, financial services company Thrivent – is seeking additional investors to help it raise a pool of $2 billion.
The 5-year-old firm wants to sign up 10 to 12 investors to raise $2 billion over the next three to five years, according to managing partner Brian Gallagher.
The fund of funds would commit $300 million to $400 million per year. Unlike traditional fund of funds, Twin Bridge does not raise commingled funds of funds. Rather, the firm sets up highly tailored separate accounts for its anchor investor. Twin Bridge invests exclusively in mid-market buyout funds in North America and is an active co-investor.
Twin Bridge is looking globally for potential LPs who want to gain exposure to mid-market private equity. The firm is targeting public pensions, insurance companies and sovereign wealth funds, among others. “The middle market leveraged buyout segment in North America is the single most developed [area] in the alternatives space,” Gallagher said.
Appetite among limited partners for separate accounts has grown since the days when the customised accounts were an “avoided strategy”, Gallagher said.
When Twin Bridge was founded, the firm used $1 billion from Thrivent, a Fortune 500 company, to set up two, $500 million separate accounts. The firm is looking to diversify its LP base, but also “hopes and expects we are part of [Thrivent’s] long-term plans”, Gallagher said.