Manulife’s GP-led secondaries programme surpasses $600m

Manulife Investment Management’s GP-led secondaries programme has reached $610 million in aggregate commitments.

The investment unit of financial services firm Manulife Financial Corporation has held the final close for its debut vehicle, private equity-focused Manulife Strategic Secondaries Fund, according to a statement seen by Secondaries Investor. The strategy also invests out of SMA accounts, the Manulife general account and other vehicles, according to a release and an interview with Jeff Hammer and Paul Sanabria, global co-heads of the GP-led secondaries strategy.

Hammer and Sanabria declined to disclose how much its standalone closed-end fund had raised as part of the overall programme milestone.

Secondaries Investor previously reported that Manulife was targeting $750 million for its debut vehicle. According to a source familiar with the matter, when the team was evaluating the resources available for its fundraise, Manulife considered establishing a $750 million target before deciding against setting a specific target. The source added the GP-led team is excited to close its debut programme which, in a difficult environment, will allow Manulife to gain a significant foothold in the growing GP-led space. A spokesperson for Manulife declined to comment.

“We are pleased with the support of our inaugural fund focused on GP-led secondaries,” Vipon Ghai, global head of private equity and credit at Manulife IM, said in the statement. “By successfully navigating a challenging macro environment, the team was able to provide a new and compelling investment opportunity for our clients.”

Manulife’s GP-led secondaries programme comprises global investors, matching its parent company’s footprint, Hammer said.

“You can imagine that we have global investors that are both institutional and [from the high-net-worth channel],” Hammer explained. “Manulife has great traction with institutional investors, as well as smaller investors through wealth aggregators, so we have been fortunate enough to be able to access investors through that very broad network.”

Concentrated focus

Manulife’s GP-led strategy has completed 18 investments over the past four years, Sanabria said. It commits tickets between $25 million-$125 million in single investments.

The strategy focuses on single-asset and concentrated multi-asset continuation funds of three or fewer assets, Hammer said.

“Usually the divide in the market is between single-asset continuation vehicles… and multi-asset. We don’t draw the line there,” Hammer explained. “We think that both investments have a purpose in a portfolio.”

The strategy seeks to differentiate itself by underwriting deeply, Hammer added. Within the timeframe of a process, the firm models the past and future prospects of a single company, which is why it seeks concentrated transactions, he added. “That ultimately will produce premium returns for our investors.”

Examples of deals Manulife’s GP-led strategy has undertaken include a three-asset continuation fund transaction for assets owned by healthcare-focused private equity firm Zenyth Partners. The team co-led on the transaction alongside BlackRock.

Secondaries Investor understands Manulife was a syndicate investor on PAI Partners’ sizeable continuation fund for ice cream manufacturer Froneri, which made up the bulk of its 2008-vintage Fund V, and eyewear group Marcolin. Both Manulife and PAI Partners declined to comment on the transaction.

Another differentiator of Manulife’s GP-led strategy is its focus on being a “relative value investor”, Hammer said. “We believe that there are certain market environments in which the large-cap concentrated GP-led deals will provide the best risk-return opportunities. This was the case in 2020… and we believe in certain environments, the mid-market… or the lower mid-market will provide the best risk-return opportunities for GP-led investing,” he added.

The GP-led team comprises six investment professionals who sit within a broader private equity and credit investment platform, which is made up of over 70 investment professionals across fund commitments, co-investments, junior capital and senior credit.

“That’s what we call [our] sponsor-centric platform,” Sanabria explained. “Each of those essentially deploys capital on behalf of third-party investors, as well as vehicles, as well as the general account. That sponsor-centric platform allows us, we think, to have advantages in sourcing, underwriting in terms of better information, and access to the right kinds of deals.”