AlpInvest set to back Kinderhook GP-led restructuring

The deal could involve around $100m in follow-on capital, Secondaries Investor has learned.

AlpInvest Partners is set to back a GP-led secondaries process involving Kinderhook Industries‘ third fund, Secondaries Investor has learned.

The Carlyle Group unit involved in a deal that involves moving between $300 million and $350 million of net asset value out of the 2009-vintage Kinderhook Capital Fund III into a separate vehicle, according to two sources familiar with the matter.

One of the sources said AlpInvest is leading the transaction.

The deal involves $100 million of follow-on capital, one of the sources said, adding that LPs have a full rollover option.

Sister publication Buyouts reported in mid-August that New York-headquartered Kinderhook was working with advisor Evercore on a secondaries process.

Fund III closed on its $300 million target in 2010 and received backing from Arizona State Retirement System, Ethics and Excellence in Journalism Foundation and Inasmuch Foundation, according to PEI data.

AlpInvest committed primary capital to Kinderhook Capital Fund V, according to the Amsterdam-headquartered firm’s 2017 annual report. At the time, this was an existing relationship for AlpInvest.

Kinderhook has 28 assets across automotive, business services, environmental services, healthcare services and light manufacturing sectors in its total portfolio, according to its website. The firm manages over $3 billion of committed capital and has made more than 200 investments and follow-on acquisitions since inception.

In January the firm held the final close of Kinderhook Capital Fund VI on $1.11 billion, above its $1 billion target, according to PEI data.

GP-led restructurings took a hammering in the first half of this year, with transaction volumes falling 57 percent to $6 billion year-on-year and the lowest level since 2017, according to data from investment bank Greenhill.

Still, secondaries buyers and advisors are expecting a pickup in GP-led activity this year post September. Last week, Secondaries Investor reported that tech investor Summit Partners was considering a process that involves moving assets from multiple funds into a continuation vehicle – potentially one of the first such deals to launch since the pandemic took hold this year.

Separate spokesmen for AlpInvest and Kinderhook declined to comment. Evercore did not return a request for comment.