A drop in first-half deal volume, set to be reflected in the second half, did little to dampen the secondaries market in a year that boasted the largest-ever fund close, several high-profile – and surprising – people moves and the launch of more specialist firms.
Here are 2016’s five most popular news articles on Secondaries Investor:
- Scandal rocked the secondaries world in March when federal prosecutors charged Andrew Caspersen, a fund restructurings expert and then-partner at advisory firm Park Hill, with attempting to defraud investors out of more than $95 million. Caspersen was later banned from working in private equity and sentenced to four years in prison after pleading guilty to two criminal counts in a story that was the most-read news story of the year. People move stories dominated readers’ interest in 2016, including the sudden departure of Coller Capital’s chief executive Tim Jones, Fondinvest losing its managing partner Hugh Dunkerley and CPPIB poaching Pantheon’s Nik Morandi, to name a few.
- California Public Employees’ Retirement System (CalPERS) returned to market with a portfolio of private equity stakes valued at $2.7 billion. The US’s largest pension has been attempting to reduce the number of external managers it has relationships with and managed to bring this number down to 99 as of 30 June, inching closer to its target of 30. A CalPERS spokeswoman confirmed the sale was still ongoing in November, and some of the portfolio has already sold, including a €500 million separately managed account to Partners Group and SL Capital Partners.
- Ardian made headlines for several reasons in 2016, including the final close of its ASF VII fund, which amassed $10.8 billion of dedicated secondaries capital, the largest fund of its kind raised. The Paris-headquartered firm also came first in Secondaries Investor‘s inaugural Si 30 ranking of the top fundraisers in the last five years, having collected $27.9 billion. But the most-read article about the French investment firm was its summer tender offer for UK buyout firm Bridgepoint’s 2005-vintage fund, which met a lukewarm response from limited partners. A majority of investors decided to stay in the €2.5 billion vehicle.
- In June, Old Mutual’s asset management unit agreed to acquire a 60 percent stake in the private equity and real estate secondaries firm for about $240 million. Connecticut-headquartered Landmark’s previous owner, Religare Enterprises, had announced almost two months earlier it was selling its interest back to the firm’s management. OM Asset Management may have made a shrewd investment: Landmark made a few high-profile deals during 2016, including a stapled deal that provided €835 million in expansion capital to TDR Capital’s 2007-vintage buyout fund, and has hit the fundraising trail with a private equity fund and a real estate vehicle, seeking a combined $6.7 billion.
- An “unfortunate perfect storm” led to the failure of energy-focused private equity firm First Reserve’s attempt to restructure its 2006-vintage fund. Lazard had been working with the firm to find buyers for stakes in its $7.8 billion First Reserve Fund XI, and Intermediate Capital Group and Pantheon had bid close to par based on its 31 March net asset value. “You’ve got an influential and upset LP, you’ve got everything trading below cost, you’ve got the public markets that make it obvious where the discount is on a daily basis,” a source familiar with the deal told Secondaries Investor. The source was referring to California Public Employees’ Retirement System’s managing investment director of private equity Réal Desrochers, who wrote a letter to First Reserve in June outlining the public pension’s displeasure with the deal.