17Capital, a pioneer in the use of preferred equity via dedicated funds, could be the next firm to change hands as the secondaries market for M&A activity hits new heights.
The London-headquartered firm has been in talks to be acquired, according to three sources with knowledge of the matter. According to one of the sources, bids have been submitted and a large global asset manager is interested in acquiring the firm.
It is unclear what stage the talks are in and a spokesperson for 17Capital declined to comment.
If the firm is acquired, this would be the seventh acquisition in the secondaries market in 2021, following Franklin Templeton’s agreement to acquire Lexington Partners in November; CVC Capital Partners’ agreement to acquire Glendower Capital in September; Ares Management’s purchase of Landmark Partners in June; and PGIM’s purchase of Montana Capital Partners, which was disclosed in July.
GP-led-focused Spring Bridge Partners and secondaries stalwart Coller Capital are also in talks to be acquired, as Secondaries Investor has reported this year.
17Capital was co-founded in 2008 by Pierre-Antoine de Selancy, who wanted to fill a gap in the market between secondaries and debt. The firm has raised five preferred equity funds since 2010, growing its fund size 29-fold between its first vintage and its latest fund – the $2.9 billion 17Capital Fund 5, according to Secondaries Investor data. The latest programme has $4.5 billion in total capital, including for co-investments.
It has raised $8.5 billion since inception, according to its website.
The firm has also been expanding its strategy and hired Thomas Doyle as a partner from JPMorgan in 2018. Doyle has since left the firm, departing in April, as Secondaries Investor reported.
In a 2019 interview with Secondaries Investor, co-founder and managing partner Augustin Duhamel said that the preferred equity market was bigger than it appeared. While intermediaries’ estimates of the market put its total annual deal volume at as much as $4 billion, Duhamel said his firm saw $10 billion in dealflow in 2018 alone.
– This report has been updated to show that Doyle joined from JPMorgan.