AnaCap runs GP-led on assets alongside separate M&A processes

The financial software and services investor is using a continuation fund to re-invest in two assets it agreed to partially exit this year.

AnaCap is near to finalising a continuation fund deal involving assets it agreed to partially exit via M&A processes this year, Secondaries Investor has learned.

The London-headquartered financial software- and services-focused investor has been working with adviser Triago to move two portfolio companies into a separate vehicle, according to three sources familiar with the matter.

The assets are commercial lines insurance broker MRH Trowe and tax-focused software developer Gestión Tributaria Territorial, according to the sources. Both MRHT and GTT are held in AnaCap’s Financial Partners III fund, according to AnaCap’s website.

HarbourVest Partners and Schroders Capital are understood to be co-leads on the deal, which is worth around €300 million. It is unclear whether there are other co-leads or syndicate members.

The transaction is at the election process stage, according to one of the sources. It is a novel process because AnaCap is running the GP-led transaction, having agreed to partial divestments of stakes in MRHT and GTT this year. In March, AnaCap said it had agreed to sell a minority stake in MRHT to TA Associates in a deal that would generate a 4.3x money multiple. AnaCap would remain a backer post-transaction, according to a statement at the time.

In July, the firm agreed to sell a majority stake in GTT to pan-European investor Stirling Square Capital Partners. It said it would retain a roughly 20 percent stake in GTT, according to statement at the time.

In both cases, AnaCap is reinvesting alongside the acquiring sponsors via the continuation funds, Secondaries Investor understands.

Continuation fund processes run alongside M&A processes have been used in previous years and appear to have quietened down this year. In some cases, the M&A process is used to set external pricing for the secondaries process; in others, they are simply an additional element to the deal. Last month, for example, Secondaries Investor reported that London-headquartered Pollen Street Capital run a GP-led process involving an asset which was subject to a bolt-on M&A process at the same time.

AnaCap initially invested in MRHT and GTT in 2020, according to the firm’s website.

Fund III is a €726.37 million vehicle that closed in 2016, according to PEI data. It had a 1.44x distributed to paid-in ratio and a 1.9x total value to paid-in ratio as of 30 June, according to a source familiar with the fund’s performance.

The fund is expected to deliver a 2.3x net return and a 2.7x gross return upon completion of the continuation fund transaction, Secondaries Investor understands.

Separate spokespeople for AnaCap, Triago, HarbourVest and Schroders declined to comment.

– This report was updated in the final paragraphs with returns figures.