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Clayton to divest Apollo, Bain, Warburg Pincus exposure

The newly appointed head of the US financial regulator must divest direct and indirect holdings in at least 54 private markets funds.

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Jay Clayton, the newly appointed chairman of the US Securities and Exchange Commission, is set to divest indirect holdings in at least 54 private market funds, having been sworn into to the position on May 4.

Clayton, a former partner at Sullivan & Cromwell whose clients include Oaktree, Och-Ziff and Goldman Sachs, has 90 days from the date of his confirmation to divest of these interests which were detailed in a disclosure to the US Office of Government Ethics.

The size of his interests in these funds was not disclosed.

     A selection of Clayton’s private funds investments
Fund name Fund manager Fund size

Vintage
Apollo Investment Fund V Apollo Global Management $3.7bn 2001
Berkshire Fund VI Berkshire Partners $1.7bn 2001
Gemini Israel IV Gemini Israel Ventures $200m 2004
Polaris Venture Partners Fund VI Polaris Partners $389m 2010
Warburg Pincus Private Equity VIII Warburg Pincus $5.3bn 2001
Ares Corporate Opportunities Fund II Ares Capital Corporation $2.1bn 2006
Bain Capital Fund XI Bain Capital $6.5bn 2014
Centerbridge Capital Partners III Centerbridge Partners $6bn 2014
Nordic Capital V Nordic Capital $1.5bn 2003

 

In a letter to Shira Pavis Minton, ethics counsel of the SEC, Clayton confirmed he will divest interests in the Sullivan & Cromwell LLP Master Trust, the 125 Broad Street Fund LLC, the 125 Broad Street Fund II LLC and 125 Broad Street Fund III LLC. These funds are invested in a list of 32 funds which in turn hold stakes in the vehicles listed above.

The letter also confirms that he has been recused for two years from cases involving former clients or those of Sullivan & Cromwell.

According to a biography on the law firm’s website, Clayton works predominately on “public and private mergers and acquisitions transactions” and on advising high-net-worth families with their public and private investments.

Deals on which he acted include Barclays Capital’s acquisition of assets from Lehman Brothers’ bankruptcy process, the $5 billion investment made by Warren Buffet’s Berkshire Hathaway in Goldman Sachs and the $25 billion initial public offering of Chinese e-commerce group Alibaba.

Several wealthy individuals who have been appointed to government positions under the Trump presidency have had to divest some financial holdings to avoid potential conflicts of interest. These include Betsy DeVos, the businesswoman and daughter-in-law of one of Amway’s co-founders who was confirmed as education secretary in February, and US Secrectary of Commerce Wilbur Ross, as Secondaries Investor previously reported.

Clayton could not be reached for comment.