W Capital closes on $700m fund

The New York direct secondary investment specialist has nearly tripled the amount of its last vehicle.

New York-based W Capital Partners, a private equity direct secondary investment specialist, has raised $700 million (€455 million) for its latest fund.

The firm, led by co-founders David Wachter, Robert Migliorio and Stephen Wertheimer, typically acts as a “replacement GP” in syndicated growth equity and venture capital deals by purchasing these stakes on the secondary market. The firm’s last fund raised $250 million in 2004.

The new fund, placed by Probitas Partners, drew commitments from endowments, foundations, financial institutions, family offices, public and private pensions and funds of funds around the world, according to a press release.

In an interview, Wachter said of the recent fundraise that the investment strategy W Capital pursues “is becoming much better understood. All of that, plus an education and a belief that this is a real market helped a lot” in convincing investors to commit to the fund.

In the release, Joncarlo Mark, a senior portfolio manager of the California Public Employees’ Retirement System, said W Capital “fills an important component of CalPERS’ private equity programme. The firm is well positioned as a result of the current market volatility.”

Wachter declined to disclose the counter-parties of any of the seven deals that the firm has already closed with the new fund. But he described one deal has providing a partial realization for a private equity firm managing a seven-year-old fund, and another deal as allowing a large institution to sell a subset of its private equity investment portfolio.

The secondary market for interests in private equity deals and funds has grown as investors have increasingly sought tools to more actively manage their otherwise illiquid private equity portfolios. In related news today, Saints Capital in San Francisco announced a final close for a vehicle that will make secondary investments in venture capital deals.