Former StepStone secondaries head launches deal-by-deal firm

Sweetwater Capital Partners will advise clients on single deals allowing LPs direct access to secondaries, co-investment and direct transactions.

A former StepStone head of secondaries has launched a private equity firm called Sweetwater Capital Partners which will specialise in secondaries, direct investments and co-investments.

James Gamett
James Gamett

James Gamett, who also founded healthcare services company Madison Creek Partners, will serve as managing partner of Sweetwater, according to a statement.

The new firm focuses on deals in venture capital, growth equity, leveraged buyouts and real estate, according to Gamett’s LinkedIn profile, which lists him as chief executive and founder of the firm in January.

Many institutions lack the resources to manage their private equity investments, and non-core investments, tail-end funds, pools of in-kind distributions, portfolio imbalances, and other factors can drag down overall portfolio performance, Gamett said in the statement.

“Those issues can be mitigated through active portfolio management, including accessing liquidity through secondary markets and building direct exposures, which typically outperforms the market,” he said.

Instead of raising blind-pool funds, Sweetwater will find deals as a “GP advisor” for its institutional clients, a source close to the matter told Secondaries Investor. Each deal will be between $5 million and $15 million in equity, the person said. It is meant to serve as a way for limited partners like endowments and foundations to gain direct exposure to private equity dealflow.

Gamett left StepStone in 2013 to form Madison Creek, which he sold in the first quarter of this year. He had also been a vice-president at fund of funds Portfolio Advisors and a senior associate at Deloitte, according to his LinkedIn profile.

Sweetwater has also hired Partners Group board member Brooks Lindberg, healthcare-focused Scion Investments managing partner Joseph Siletto, former StepStone analyst and Signal Peak Ventures senior associate Ron Heinz and former StepStone analyst and Madison Creek corporate finance analyst Cameron Rondo.

Sweetwater is currently assisting the Texas Treasury Safekeeping Trust Company’s wind-down of its Emerging Technology Fund, which the state’s former governor Rick Perry  launched. As part of this project, Sweetwater is screening candidates for follow-on capital and positioning companies in the fund for exits, the firm said.

In secondaries, it is advising real estate firm Belgravia Capital on its mortgage-backed securities secondaries purchase programme.