HarbourVest, Portfolio Advisors pick up Black Diamond stakes – exclusive

One of the interests sold in the manager's 2006-vintage distressed fund was a $100m stake held by Ontario Teachers' Pension Plan, Secondaries Investor has learned.

HarbourVest Partners and Portfolio Advisors were among buyers of separate stakes in distressed manager Black Diamond Capital Management‘s 2006-vintage fund, Secondaries Investor has learned.

At least four stakes in the $982 million BDCM Opportunity Fund II have been auctioned since the fourth quarter, with at least three closing so far, according to three sources familiar with the deal. The interests traded at between 90 percent and 116 percent of net asset value when compared with a 30 September valuation date.

According to the sources:

  • Portfolio Advisors acquired around a $20 million stake in an auction process run by Greenhill Cogent that closed in the fourth quarter of last year.
  • A second stake worth around $12 million traded between undisclosed parties that closed in the first quarter of this year.
  • HarbourVest acquired a stake worth $100 million from Ontario Teachers’ Pension Plan that closed in the second quarter.
  • Advisory firm and placement agent Triago auctioned a stake worth $26.9 million in NAV. It is unclear whether this deal has closed.

BDCM II closed above its $750 million target in 2007 and attracted commitments from limited partners including Oregon Public Employees’ Retirement SystemNew Jersey Division of Investment and Indiana Public Retirement System, according to PEI data.

The largest asset in BDCM II is ION Media Networks at about 50 percent of the value of the fund. Black Diamond owns about 87 percent of ION through Media Holdco LP, according to ratings agency reports.

One of the sources familiar with the fund said ION was “significantly” marked up in the fourth quarter of last year.

Greenwich-headquartered Black Diamond invests in control distressed/private equity, hedge fund and CLOs and other structured vehicles. Its control distressed/private equity funds focus on mid-market companies with market leadership positions within their sectors, according to its website.

HarbourVest, Triago, Portfolio Advisors and Greenhill declined to comment. Black Diamond and OTPP did not return requests for comment.