SL Capital in $171m for latest secondaries fund

SL Capital Partners has held a second close on $171 million for its sophomore secondaries fund, according to documents from the San Bernardino County Employees’ Retirement Association (SBCERA) dated 10 March.

SL Capital declined to comment.

SL Capital Secondary Opportunities Fund II (SOF II) launched last year with a $200 million target. The fund will include a general partner commitment of 1 percent or up to $2 million.

Limited partners in SOF II will pay a 10 percent carried interest rate over a 12 percent preferred return. The management fee is 0.6 percent of net asset value of investments and 0.4 percent for LPs committing at least $25 million.

The fund is expected to close at the end of April or in early May – eight to 10 weeks after the firm stopped new marketing on 28 February.

SOF II has the same investment strategy as its predecessor fund (SOF I) which closed on $190 million in February 2014. It focuses on “niche or less competitive” areas of the secondaries market and will buy private equity fund stakes of between $10 million and $50 million. Typical stakes will be at least 40 percent funded.

To date the fund has drawn $19 million from LPs and committed $21 million to restructure a 2006-vintage US mid-market buyout fund. As part of the fund restructuring SL Capital acquired eight assets that were 85 percent funded as of December 2014, when the deal closed. SOF II invested in the restructuring alongside SOF I.

SOF II is expected to be invested over a three-year period and is targeting a 20 percent gross internal rate of return.

PwC and King & Wood Mallesons are advising SL Capital on the fund.