Aquiline closes CV, receives concurrent primary commitments to flagship fund

Secondaries investors in the $1.1bn continuation fund also committed to the firm's latest fund in market, which closed on more than $2.3bn.

Aquiline Capital Partners, a financial services and related technologies-focused private equity firm, has closed a multi-asset continuation fund transaction and also attracted primary capital for its latest flagship fund in market.

The New York-headquartered manager ran a process to move undisclosed companies from its Aquiline Financial Services Fund II and Aquiline Financial Services Fund III funds into a separate vehicle, according to a statement.

HarbourVest Partners was sole lead on the continuation vehicle, which closed on around $1.1 billion. StepStone, Ares Management and Commonfund’s CF Private Equity unit also backed the transaction.

Secondaries investors also invested in Aquiline’s Fund V, a spokesperson for the firm told Secondaries Investor. Fund V concurrently closed on at least $2.3 billion and is the firm’s largest vehicle to date.

The spokesperson did not specify which secondaries firms committed primary capital to Fund V. A separate spokesperson for Aquiline said this was not a stapled transaction as there was no contractual obligation for secondaries buyers to commit primary capital.

Evercore advised Aquiline on the continuation fund transaction, the spokesperson said.

Limited partners in Funds II and III were all given the option to roll their exposure on status quo terms, reinvest into the continuation fund or take full liquidity, according to the statement.

Fund II, which closed in 2012, had a 1.09x distributed to paid-in ratio and a 1.43x total value to paid-in ratio as of end-September, according to data from Oregon State Treasury compiled by affiliate title Private Equity International. The fund had a 7.10 percent internal rate of return as of the same date, per Oregon State.

As of the same date, Fund III, which closed in 2016, had a 1.49x distributed to paid-in ratio and a 2.44x total value to paid-in ratio. It had delivered a 32.5 percent internal rate of return.

The continuation fund includes follow-on capital to “support future growth initiatives and potential strategic acquisitions within the portfolio”, the statement noted.

Secondaries transactions involving concurrent primary capital can come in various formats, as Secondaries Investor has detailed.

Stapled ratios overall for GP-leds increased slightly last year, with buyers committing 1 primary dollar for every 2.9 dollars of secondaries capital, according to Campbell Lutyens2024 Secondary Market Overview. This was up from 2.6 secondaries dollars the prior year.

Last year’s figure is still down from prior years: in 2019 and 2020, buyers saw stapled deals less favourably, requiring 3.9 and 3.7 dollars of secondaries capital, respectively, for every 1 dollar of primary capital, per Campbell Lutyens data.

Willkie Farr & Gallagher was legal counsel on the continuation fund, and Simpson Thacher & Bartlett was counsel for the Fund V fundraise, according to the spokesperson. Kirkland & Ellis provided legal advice to HarbourVest, according to a separate statement, while Goodwin advised StepStone.

Aquiline ranked 289th in this year’s PEI 300 list of the biggest private equity fundraisers. The firm raised $2.4 billion in the five years to 31 December.

It had around $10.4 billion in assets under management as of end-March.

– This report has been updated to add Evercore as the adviser and to remove reference to it being called a stapled deal.