AlpInvest Partners has backed the spinout of an investment team that was once part of one of the world’s most prominent hedge funds.
The Carlyle Group subsidiary bought a portfolio of investments made by the healthcare investment unit of insurer Assured Guaranty, according to three sources with knowledge of the matter. The acquiring vehicle, AHP I, will be managed by the same team, which spun out under the name Assured Healthcare Partners, Secondaries Investor understands.
The investment team had been part of hedge fund BlueMountain Capital Management, which was sold to Assured Guaranty in October 2019 after suffering heavy losses.
AlpInvest also made a stapled commitment to follow-up fund AHP II as part of a deal worth between $600 million and $700 million including follow-on capital, Secondaries Investor has learned. The deal was syndicated among more than 10 investors including insurance companies, pensions and family offices.
Evercore is understood to have advised on the process.
The spin-out was structured to offer liquidity to some of BlueMountain’s existing limited partners spread across multiple funds, Secondaries Investor understands.
“You had legacy LPs owning these assets that were no longer a good fit for their portfolios and you had this quality GP looking to build a franchise… This was perfect for us,” said Julian Rampelmann, managing director with AlpInvest, who is particularly interested in situations where “transition capital” is required to help promising emerging GPs launch platforms or allow existing GPs to expand their LP bases.
He did not comment on specifics of the transaction.
Assured Healthcare Partners is led by managing partner and chief investment officer James Pieri, according to its website. He had been a partner and head of private healthcare at BlueMountain. Among its investments are women’s health services platform Advantia Health and anaesthesia services business National Partners in Healthcare.
BlueMountain made headlines in 2012 when it made substantial profits out of the “London Whale” incident, when JPMorgan Chase lost $6 billion on trades involving credit default swaps, according to the Financial Times. The firm increased its assets under management from $12 billion in 2012 to $23 billion in 2016 and started five strategies over roughly the same period, including healthcare investing in 2013.
Soon after its acquisition by Assured Guaranty, BlueMountain said it would unwind its flagship $2.5 billion credit fund due to heavy losses. BlueMountain was renamed Assured Investment Management last September.
According to Assured Investment Management’s website, the firm’s chief risk officer Robert de Veer has previously worked at Carlyle, including at AlpInvest and real estate secondaries unit Metropolitan Real Estate Equity Management.
AlpInvest closed its seventh secondaries programme in December on $10.2 billion, with support from investors including the California Public Employees’ Retirement System, which committed $500 million.
Spin-outs accounted for 7 percent of GP-led deals by volume last year compared with 5 percent in 2019, according to data from Greenhill.
Assured declined to comment. Evercore did not respond to a request for comment.