AlpInvest to back Warburg single-asset deal – exclusive

The process on the 2011-vintage $11.2bn Fund XI will give the private equity giant liquidity while allowing it to continue managing a prize asset.

AlpInvest Partners has emerged as a buyer in what could be the largest single-asset deal yet, Secondaries Investor has learned.

The Carlyle Group unit is lined up to back the deal that involves portfolio company Allied Universal, according to two sources familiar with the matter. Allied would be lifted out of Warburg Pincus’s 2012-vintage Fund XI and placed into a separate vehicle backed by secondaries capital, Secondaries Investor reported in May.

Lazard is understood to be advising on the process.

In February, Canada’s Caisse de dépôt et placement du Québec acquired a stake in Allied – North America’s largest security and personnel systems provider – which valued it at $7 billion, according to a statement at the time. Warburg Pincus owns around one-third of Allied Universal, the firm said in a July statement.

AlpInvest is investing through its sixth secondaries programme, which raised $6.5 billion –above its target of $6 billion – by final close in March 2017.

Single-asset restructurings tend to occur when the last company in a fund needs more time to achieve an optimal exit. The $11.2 billion Fund XI has several assets remaining, Secondaries Investor understands.

According to one buyer familiar with the process, this deal is designed to give Warburg liquidity without it having to exit one of Fund XI’s best-performing assets.

The options given to existing limited partners in Fund XI are unclear.

In 2017, Warburg Pincus worked with Lazard on a $1.2 billion strip sale on Fund XI in which a slice of assets were moved into a separate vehicle backed by Lexington Partners and Goldman Sachs Asset Management.

Single-asset restructurings jumped in popularity last year, accounting for around 9 percent of all complex secondaries deals by volume, according to a survey by Evercore.

AlpInvest Partners declined to comment. Lazard and Warburg Pincus did not return requests for comment.