Adams Street, Barings, Kline Hill co-lead on transportation asset CV

Adams Street Partners, Kline Hill Partners and Barings have taken the lead on a single-asset continuation fund transaction involving an asset in the transportation industry.

Michigan-based TRP Capital Partners, which focuses on commercial and consumer segments in the transportation industry, has moved its stake in industrial gas transportation provider GenOX into a continuation vehicle, according to a statement shared with Secondaries Investor. 

This is TRP Capital’s first continuation fund transaction, managing partner David Mitchell told Secondaries Investor. The firm manages $771 million, including the continuation fund.

GenOX was held in the firm’s TRP Capital Partners IV fund before being transferred to the continuation vehicle, according to Mitchell. TRP is in market with its TRP Capital Partners VI fund, which has already held a first close on $151.11 million, according to data from affiliate title Private Equity International. Fund VI launched in December.

Mina Pacheco Nazemi, head of diversified alternative equity at Barings, and Raudel Yanez, managing director at Kline Hill, said they like partnering with sector specialists with trophy assets and value creation expertise.

Troy Barnett, partner at Adams Street, said the firm’s participation in the deal was driven by the market-leading position of the underlying asset and TRP’s track record of managing such investments.

“The small- and medium-sized market in the secondary business has a lot of players. Many of them don’t really pass muster for our criteria of investment,” Barnett told Secondaries Investor. “We are looking for differentiated transactions in our portfolio. This isn’t something that the large-cap market…is going to have access to. It’s a unique opportunity.”

GP-led secondaries have become an increasingly established exit path for LPs amid the scarcity of more conventional exit options. Continuation vehicle transactions are expected to account for 9 percent of total PE distributions to LPs in 2023, according to data from investment bank Baird. The figure has seen a consistent annual increase since 2016 and is up from 5 percent in 2022.

In the lower mid-market, however, fewer managers are testing the waters of continuation vehicles due to the complexity of such transactions. In the case of the GenOx deal, both Barings and Adams Street have previously invested with TRP, which helps them understand the manager’s strategic approach and operational expertise, according to Nazemi and Barnett.

Kline Hill and Barings primarily target single-asset deals within the GP-led market, as opposed to Adams Street, which tends to concentrate on multi-asset transactions, the three buyers told Secondaries Investor.

TRP Capital has no immediate intention to pursue another continuation fund transaction, Mitchell said. Should plans change, it would lean towards a single-asset deal, he added.

Jefferies served as financial adviser and Weil served as legal counsel to TRP and GenOx. Cleary Gottlieb advised Kline Hill and Barings. Proskauer served as legal advisor to Adams Street.

TRP Capital and the three lead buyers declined to disclose the size of the GenOx deal.