Montana raises first €1bn-plus fund

Montana Capital Partners has held the final close on its fifth secondaries fund, having launched the vehicle at the height of the coronavirus crisis.

The Baar, Switzerland-headquartered firm has raised €1.3 billion for mcp Opportunity Secondary Program V from around 40 large institutional investors, including sovereign wealth funds, pensions, insurance companies, family offices and foundations, according to a statement seen by Secondaries Investor.

This does not include the GP commitment, which is equivalent to “more than 2 percent of the original target volume”, the statement noted. The fund’s target was €1 billion, according to Secondaries Investor data.

“We are grateful to continue the close relationship with our existing investors which have increased their commitments to OSP V substantially,” said managing partner and co-founder Christian Diller in the statement. “We are also honoured to add some of the most reputable and sophisticated institutional investors from around the globe as our investors.”

The fund has been in market for eight months and all meetings with LPs were held virtually, the statement noted.

OSP V received support from Montana’s first Japanese limited partner and its first US public pension, managing partner and co-founder Marco Wulff told Secondaries Investor.

LPs were attracted to the firm’s niche strategy, which they viewed as complementary to that of larger secondaries funds, and to the resilience of the firm’s existing portfolio, Wulff said. Nearly half of Montana’s 2017-vintage Fund IV is committed to the healthcare and technology sectors, which have been among the industries that have generally held up well during the pandemic.

Predecessor OSP IV raised €815 million, against a target of €400 million, by final close in 2018, according to Secondaries Investor data.

In October of last year, a group of investors led by Montana and Singapore sovereign wealth fund GIC acquired an $875 million strip of assets off the balance sheet of China Ping An Insurance Overseas and used it to seed two private equity funds. The deal was the first to be backed by Fund V, which Wulff said was 10 percent committed.

In a survey of LPs carried out by Montana, around two-thirds indicated that they expect capital calls to exceed distributions this year as a result of the covid-19 crisis. This could encourage LPs to sell their holdings in the secondaries market, Diller said at the time.

Montana was founded in 2011 to focus on small and complex secondaries transactions. It invests in both LP portfolio sales and GP-led deals.