Wafra and Investcorp have teamed up on a GP stakes deal to partner with MML Capital as the mid-market-focused investment firm looks to its next stage of growth.
London-headquartered MML sold a passive minority stake to the pair, Bal Johal, co-chief executive at the firm, told Private Equity International. The size of the stake was in the double-digits and both Wafra and Investcorp own equal stakes, Johal said.
The transaction addresses a succession issue, with co-founder and chair Rory Brooks retiring from the business. It will also help MML with scaling its business, particularly on an international level, and with expanding its infrastructure business, Johal added.
Houlihan Lokey served as financial adviser to the transaction, according to details shared with PEI.
The GP stakes market has had increased activity so far this year with managers taking advantage of a confluence of events to raise capital from GP stakes buyers for various reason. These include seeking capital for expansion and strategy launch plans; partnering with a firm to help with fundraising; managing shareholder liquidity or financing GP commitments.
Firms including Coller Capital, Inflexion Private Equity, FTV Capital and L Catterton have all disclosed sales to GP stakes buyers in recent months.
Wafra, which was already one of MML’s LPs prior to the transaction, made its investment via its Capital Constellation platform – a joint venture with Alaska Permanent Fund Corporation and Railpen – according to the details shared with PEI.
Johal and fellow co-chief executive Ian Wallis will continue to run and majority own MML alongside the MML partners.
MML was founded in 1988 as a mezzanine-focused investor and now focuses on providing growth capital to companies in Europe and the US. Exits include fund governance business Waystone, held in its MML Fund VI, which it sold last year to Montagu Private Equity for a gross 10.6x return; and flexible workspace-focused company Instant, which MML sold to IWG for a 4.3x gross return.
The firm’s value-added infrastructure business in pan-European in focus and invests €40 million to €80 million in assets with €10 million or more in EBITDA, according to MML’s website.
The firm has offices in Dublin, New York and Paris in addition to its London headquarters.