This week, global asset manager Unigestion revealed it would buy the Swiss fund of funds. Both parties are five months away from fund closes, so Secondaries Investor caught up with Unigestion’s Christophe de Dardel and Akina Partners’ Thomas Frei on how a combined entity with $6bn of private equity assets under management will work.
How does the acquisition impact management of the firms’ funds?
Frei: The funds will continue to be managed separately for the time being and will operate as before from the point of view of sourcing, execution and portfolio management.
The investment unit of the merged firm will have a co-head structure, with Mark Zünd from Akina continuing to manage Akina programmes and Paul Newsome doing the same for Unigestion.
Underneath this co-head structure, the teams will stay in their current functions with each head responsible. Looking forward, there will be joint products where the teams will co-operate closely.
The vision for the joint group is that we are going to be delivering small and mid-market-focused programmes in three regions – Europe, North America and Asia – and clients will have the flexibility to say which region of the strategy they want exposure to. Each strategy will be driven by those people most recognised in the respective market.
Will you continue to raise similar-sized funds, or will you aim to raise larger vehicles now?
Frei: Historically for our secondaries funds we have been doing between €200 million and €300 million for Europe only. Now after the merger we are going to have a global offering with some kind of compartments for the different regions, so as a consequence I suspect the overall size will be a bit larger than €300 million.
Historically both of our organisations have been really good at sizing the opportunity and then raising what we believe is a reasonable fund size to exploit that opportunity. And currently the opportunity is where we are both active – hidden gems and unauctioned transactions. I would not want to follow Ardian or Lexington or Coller.
What would happen if the two teams found themselves competing on a transaction?
Frei: We would raise it to the level of the investor advisory board to get an opinion and move according to their views. This is why it is important to have cross-participation at the investment committee level, to identify the competing cases.
Both Unigestion and Akina are fundraising for secondaries vehicles. What were LPs’ reactions?
De Dardel: On both sides the response was very positive. The existing client base is very complementary. Together, we have about 200 clients in PE and it is amazing to see the number of common clients – you can count then on one hand. In terms of new LP prospects we both have the same names in mind of course, but we are five months from final close [with our respective vehicles] and we know who is going to receive commitments.
Frei: We have been talking to LPs in Euro Choice VI [Akina’s latest fund of funds] about what was going to happen with this merger and no one decided not to invest. On the contrary – they said “that’s visionary”.
These things sometimes happen by chance or coincidence. Unigestion and Akina came together but neither from a position of stress. You flirt, you date, you get closer and see whether you culturally fit, then you fall in love and you do it.
How will consolidation affect deal sourcing this year? Let me know your thoughts: adam.l@peimedia.com or @adamtuyenle
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