DWS closes debut mid-life secondaries fund

DWS has held the final close on its debut secondaries fund, the culmination of a multi-year rebuilding process.

The Frankfurt-headquartered asset manager has raised $550 million for the Private Equity Solutions fund and related co-investment vehicles, exceeding its target of $500 million and hard-cap of $525 million, according to a statement.

The fund has already made 12 investments, the statement noted. These included two deals involving companies managed by Revelstoke Partners, Secondaries Investor has reported.

The fund has been in market since June 2019, according to Secondaries Investor data. It received a $200 million anchor investment from the State of Wisconsin Investment Board in September that year.

“It is a testament to the strength of our team globally for the inaugural PES fund to be oversubscribed, and with the majority of the fundraise taking place during the current covid pandemic,” said Mark McDonald, global head of private equity, in the statement.

Secondaries Investor understands that Private Equity Solutions is the only fund dedicated to mid-life secondaries deals. The strategy entails targeting top-performing assets, typically two or three years into their holding period, that need capital to make acquisitions or expand into new markets.

The capital is introduced through a special purpose vehicle and secured against the asset, McDonald told Secondaries Investor in September: “We combine a direct investing skillset with the structuring of secondaries… The goal is to create significant alignment with the GP.”

McDonald joined DWS in 2017 after its secondaries team spun out to form Glendower Capital. He came from Credit Suisse, where he led its EMEA secondaries advisory business.

“Our thesis is to access attractive assets in unique ways; being more of a partner in providing solutions versus a more ‘traditional’ secondaries investor,” said McDonald at the time.

He was joined in January 2018 by Daniel Green from Meketa Investment Group as EMEA head of private equity secondaries. Kumber Husain, an executive director at Morgan Stanley Alternative Investment Partners, joined as head of private equity Americas the following November.

Secondaries funds that held final close raised $48.7 billion in the first three quarters of this year, compared with $58.5 billion in the same period of last year, according to Secondaries Investor data.