Of the stories about BlackRock’s new secondaries business, it was one announcing the arrival of Derek Krouner as director that proved most popular. The former Goldman Sachs vice-president and member of our Young Guns Class of 2017 followed his erstwhile Goldman colleagues Steve Lessar, Konnin Tam and Jarid Colucci to the world’s largest asset manager in May. The team has popped up on a few deals, including the restructuring of Thomas H. Lee Equity Partners VI, and a fund is set to follow.
A $1 billion portfolio is not particularly large in the context of today’s market, but the seller garnered a lot of attention. The billionaire investor’s family office Soros Fund Management wanted to de-risk its portfolio by offloading what one source described as an “eclectic” portfolio containing vehicles such as Silver Lake Kraftwerk Fund, a $711.50 million, 2012-vintage fund that focuses on energy and resource innovation. We never did find out who bought it. Answers to the email address below, please.
How did an investor that uses no leverage and lacks the incentive of carry become one of the biggest secondaries investors in the world? That was the question we asked in February of Canada Pension Plan Investment Board, tracing the pension’s journey from being an acquirer of vanilla portfolios to lead backer of some of the most sophisticated GP-led secondaries deals. “Those guys are really smart, flexible and nice; I mean they’re Canadian,” said a partner at a global law firm at the time.
The spinout of Standard Chartered’s private equity team, backed by the strategic equity team at Intermediate Capital Group, encompassed 35 portfolio companies, three continents, 55 PE professionals and $1 billion of secondaries capital. Our deep-dive into how this team became Affirma Capital, a process with roots that go back to 2015, garnered interest from well beyond the secondaries community.
Articles about fees and terms always attract attention, as do articles about Goldman Sachs Asset Management: combine the two and you have a hit. In February we revealed that Vintage VIII, which is in market targeting $7 billion, had set its carried interest at 12.5 percent, up from 10 percent for 2017-vintage Vintage VII. The typical carried interest charged on secondaries funds is 10 percent, according to law firm MJ Hudson. A spokesman for Goldman declined to comment.
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