News & Analysis

Auldbrass holds interim Fund III close

The firm targets growth assets via GP-led deals, highly concentrated LP stake trades and preferred equity.

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Auldbrass Partners, which spun out of Citi in the wake of the financial crisis, has held an interim close on its third fund.

The New York-headquartered secondaries firm has collected $148.6 million for Auldbrass Partners Secondary Opportunity Fund III, according to a filing with the US Securities and  Exchange Commission.

This does not reflect the total amount raised for the fund so far, according to a source with knowledge of the firm.

Auldbrass declined to comment on fundraising when contacted by Secondaries Investor.

Secondaries Investor reported in 2020 that Auldbrass was coming back to market with Fund III. It is understood the fund will stay open at least until it reaches its target of $200 million. It has a hard-cap of $250 million.

Auldbrass’s 2017-vintage Secondary Opportunity Fund II raised $185.6 million, against a target of $100 million, from investors such as Allegheny County Retirement System, according to Secondaries Investor data.

The firm primarily targets concentrated growth equity bets in the software, education technology, healthcare and tech-enabled sectors. This comes in the form of GP-led deals, preferred equity transactions and highly concentrated LP stake trades. With the exception of subscription credit lines, the firm does not use leverage, Secondaries Investor understands.

Managing partner Howard Sanders was responsible for the private assets of Citi Holdings’ $11 billion pension fund. From 2009 until the spinout of Auldbrass in 2011, he oversaw the divestment of $3.5 billion of limited partnership interests as part of the bank’s post-crisis retrenchment from private markets.

Auldbrass’s first fund, which closed in 2014, targeted discounted LP stakes being sold by banks in order to comply with the Volcker Rule, Secondaries Investor understands. Ardian was an early investor.

Secondaries funds raised $63.8 billion last year, marking the second-highest annual period of fundraising for the strategy, according to data compiled by Secondaries Investor.