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Kensington: ‘selective’ toward secondaries

Toronto-based Kensington Capital Partners hasn’t invested in secondaries since 2010, when it purchased two stakes in Trivest Fund IV, explained managing director Suganya Tharmalingam.

Toronto-based investment firm Kensington Capital Partners (KCPL) hasn’t invested in a secondaries deal since 2010, but remains selective toward the market, said managing director Suganya Tharmalingam.

Suganya Tharmalingam
Suganya Tharmalingam

KCPL previously bought two positions in Trivest Partners Fund IV, a $325 million US mid-market private equity fund that was already in KCPL’s portfolio.

KCPL paid $200,000 in cash for the pair of fund stakes, which together had about $1 million in unfunded commitments. The firm funded the transaction using its mutual fund trust Kensington Private Equity Fund, which enables Canadian institutions and high net worth individuals to make private equity fund and direct investments in North America.

Investing in primary private equity guarantees consistent distributions for the firm, said Tharmalingam, whereas KCPL prefers to spend time selecting secondaries investments, most of which are offered through existing fund managers.

“If one of our existing LPs has a portfolio to sell then we will consider it if the price is right, but otherwise we are not actively looking on the secondaries market,” she said.

Toronto-based KCPL has committed over $600 million to private equity. The firm is currently in market with Kensington Venture Fund, which launched in 2014 with a C$300 million ($250 million; €216 million) target. Tharmalingam declined to comment on fundraising except to explain the fund doesn’t have a fixed allocation to secondaries but would be open to making some secondaries investments.