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Glendower buys Liberty stake via single-asset deal

The secondaries buyer becomes a minority shareholder in the high-end UK department store alongside principals from former owner Bluegem Capital.

A stake in high-end UK department store Liberty has changed hands via the secondaries market.

Bluegem Capital exited its position in the London-based brand to a consortium led by Glendower Capital in a “secondary recapitalisation” which values the asset at £300 million ($374.5 million; €333.7 million), the consumer-focused buyout firm said in a statement.

According to a buyside source familiar with the deal, Liberty has been lifted out of the 2013-vintage Bluegem II and placed in a new vehicle backed by the consortium and Bluegem’s partners, who rolled in their existing equity in the business. As the largest shareholder, with a 40 percent stake, Glendower has minority shareholder protections and governance rights.

“Bluegem as individuals are remaining and directing the company… They maintain direct governance as principals but not on behalf of Bluegem funds,” the source said.

The firm first acquired Liberty in 2010 with the 2006-vintage Bluegem Capital Partners. Its EBITDA has gone from close to zero in 2010 to £25 million last year, the statement notes. Since 2010, Bluegem generated returns of 12 times its original investment.

In June 2018 Glendower backed a GP-led process on Bluegem Capital Partners in which limited partners were given the option to sell their stakes or roll into a continuation vehicle, Secondaries Investor reported. The deal was worth €106 million, including follow-on capital.

Glendower is in market targeting $2.5 billion for Glendower Capital Secondary Opportunities Fund IV, its first fund since spinning out of Deutsche Asset Management in 2017.

Europe accounted for 20 percent of GP-led processes by value in 2018, against 62 percent in 2017, according to data from advisor Lazard.

Article updated to reflect that Bluegem’s partners have rolled existing equity into the new vehicle