Brockman-linked firm eyes $1bn-plus sale of mostly Vista LP stakes

The Point Investment sale is part of a wave of LP secondaries driving activity in the market this year.

A Bermuda corporation launched by the late Robert Brockman, the man accused of running what has been called the largest individual tax fraud in US history, is exploring the sale of a portfolio of interests in funds and co-investments primarily managed by Vista Equity, two sources told affiliate title Buyouts.

The sale comes amid efforts by the IRS to collect $1.4 billion from Brockman’s estate for unpaid taxes. The Bermuda Supreme Court ordered in 2022 that the corporation, Point Investment Ltd, be liquidated and now, as per Bermuda law, the corporation is being managed by joint liquidators, a source said.

Later that year, the liquidators filed for Chapter 15 bankruptcy protection from the IRS seizing the corporation’s assets while the liquidators did their work.

As part of the process, the joint liquidators, working with Vista, are evaluating the secondaries sale, the two sources said.

Jefferies is working with the joint liquidators on the process, which could result in a full or partial sale or no transaction, three sources said. Pricing for the stakes is not clear. LP stakes in high-quality buyout funds are generally selling in the range of 90 percent or more of net asset value. Pricing drops for older funds that are part of so-called “clean-up” sales, or for funds of lesser quality.

GPs have ultimate say over who can be an LP in their funds, which also pertains to secondary sales, which GPs must approve. Vista is said to have a list of 10 or so “approved” buyers of LP stakes in its funds, sources have told Buyouts in past interviews. It’s not clear if that list has expanded over the years.

The portfolio is about $1.3 billion in total value. No one from Vista returned a comment request. Buyouts also reached out to attorneys who are working on Point Investment’s liquidation process and did not hear back.

Brockman, a Houston-based software billionaire, seeded Vista with $1 billion and was the firm’s only LP in the debut fund. He created Point Investments to invest in Vista funds, according to the 2020 indictment against Brockman.

Federal authorities accused Brockman of using Point to conceal around $2 billion of capital gains generated from the Vista investments, the largest single tax evasion case in US history, the indictment said. Brockman died in 2022, ending the criminal case.

The Point Investment process is part of a wave of LP secondaries driving activity in the market this year. So far, LP sales have led the way, representing about 65 percent of total market volume in the first quarter, according to PJT Park Hill research.

“Multiple consecutive quarters of reduced distribution activity across their portfolios has led to a multitude of LPs leveraging the secondary market,” PJT Park Hill’s Q1 report said.

Los Angeles County Employees’ Retirement Association closed the sale of a private equity portfolio this year valued at around $1.4 billion, Buyouts reported. One of the main buyers in the deal was Ardian.