ICG has brought forward the launch of its next flagship GP-led secondaries fund by two years due to faster-than-expected deployment in the area.
The London-listed manager launched Strategic Equity IV in early November, Benoît Durteste, the firm’s chief investment officer and chief executive, said on a half-yearly earnings call on Tuesday.
“We have experienced a surge in deal activity since June, and in particular for two flagship strategies” including the firm’s Strategic Equity III secondaries fund, Durteste said. As a result, Strategic Equity IV has already been launched two years ahead of plan and the firm plans to upsize the fund “meaningfully” he added.
Asked about the potential size of Strategic Equity IV, Durteste said that the firm plans to remain the largest specialised player in GP-led secondaries because this gives it a competitive advantage.
“There are very, very few players that can actually play with size in that space of GP led transactions,” he said.
Strategic Equity Fund III, a $2.4 billion 2018-vintage vehicle, was 48 percent invested as of end-September, according to documents accompanying the earnings call.
“We invested [SE III] in less than 18 months, and so it’s very clear that the fund is too small for the market opportunity,” Durteste said. “That gives us a case to meaningfully upsize the fund. We’ve never gone extreme in this; we’ve always done this progressively.”
The firm has had to delay the launch of two funds, including for its LP secondaries strategy, as investors focus on existing funds and existing GP relationships due to the coronavirus crisis, Durteste said.
Secondaries Investor reported in June that Oliver Gardey, who joined ICG last year from Pomona Capital, would be responsible for the firm’s LP secondaries business. European secondaries are led by Vivien Blossier who joined last year from Unigestion.
Its Strategic Equity unit is led by Andrew Hawkins, with managing directors Christophe Browne in New York and Ricardo Lombardi in London.
As of 30 September, the firm’s 2014-vintage Strategic Secondaries Fund I had delivered a 174 percent gross distribution to paid-in-capital, while the 2016-vintage Strategic Secondaries Fund II had delivered 79 percent, according to the earnings documents.