The investment bank teamed up with Madrid-headquartered Arcano Asset Management to acquire half of limited partners’ stakes by value in Duke Street Capital VI in a process run by Lazard. The buyers have also committed as much as €130 million to a blind-pool fund which will be used for new co-investments.
It is understood between €120 million and €130 million of net asset value traded hands and that Goldman was the majority buyer.
“It was pleasing to see that the end price was a premium,” James Almond, partner and head of fundraising at Duke Street, told Secondaries Investor. “The structure of the deal itself – restructuring and doing it as a one-off transaction – helped with the pricing in addition to a good strong portfolio of assets.”
Almond declined to comment on pricing details, but Secondaries Investor understands the stakes traded at a single-digit premium to June 2016 net asset value.
LPs who decided to stay had their stakes moved into a special purpose vehicle, Duke Street VI SPV, which is a four-year vehicle that replicates the terms of Duke Street VI.
The cornerstone fund will commit up to 50 percent of equity into new investments, with Duke Street itself committing between 3 percent to 5 percent and the remainder coming from other LPs. Since 2012 Duke Street has been investing on a deal-by-deal basis with a group of around 20 LPs, and has co-invested in five deals with a combined enterprise value of more than £700 million ($875 million; €814 million), according to the statement.
Duke Street VI, which closed on €963 million, had a 2.3x return multiple and a 29 percent gross internal rate of return, according to the statement. It is understood this valuation date is as of June 2016.
The fund’s six remaining assets, which include pan-Asian restaurant chain Wagamama and UK discount department store operator The Original Factory Shop, will be moved into the SPV.
It was not clear which limited partners in Duke Street VI, which include Greater Manchester Pension Fund, AlpInvest Partners and Lancashire County Pension Fund, according to PEI data, sold their stakes.
It is understood Arcano invested in the restructuring from its two most recent funds, Arcano Capital X and Arcano Capital XI, which focus on secondaries. It was not clear which vehicle Goldman used to invest in the restructuring.
GP-led restructurings rose to account for around one-third of deal volume in 2016, up from 25 percent the previous year, according to Credit Suisse.