Morgan Stanley makes headway with latest GP-led secondaries fund

Ashbridge Transformational Secondaries Fund II is targeting $3.5bn to invest in complex deals, with single-asset restructurings a key focus.

Morgan Stanley has held an interim close on its second fund dedicated to GP-led secondaries.

Ashbridge Transformational Secondaries Fund II has collected $1.37 billion against a target of $3.5 billion, according to a filing with the US Securities and Exchange Commission. The fund made a first sale in June last year, the filing shows.

Secondaries Investor reported in March last year that Fund II would be a step up in size for Morgan Stanley. Predecessor Ashbridge Transformational Secondaries Fund I and fund of funds Private Markets Fund VII raised a combined $1.9 billion in 2019. The firm did not disclose the individual totals raised.

Transformational secondaries encompasses fund restructurings, recapitalisations, strip sales, single-asset deals and spin-outs, Morgan Stanley noted in a 2020 document about secondaries.

The firm has described its emphasis on single-asset deals as a “distinguishing characteristic”, with such deals allowing for “greater transparency and due diligence on the underlying portfolio companies” and “potentially stronger partnerships” with the sponsors.

In early February, Morgan Stanley closed a single-asset deal centred around Axispoint Technology Solutions Group, a portfolio company owned by New York-headquartered growth investor RunTide Capital. The deal gave the general partner an extra $200 million to continue with a buy-and-build strategy.

In December, Nash Waterman took over as Morgan Stanley’s sole head of secondaries as former co-head John Wolak moved into a senior advisory role. Neha Champaneria Markle took over as head of AIP Private Markets Solutions, which encompasses PE fund investing, secondaries, co-investments and impact investing.

In early June, Secondaries Investor reported that Morgan Stanley had hired PJT Park Hill managing director Charles Carroll to spearhead the launch of the bank’s secondaries advisory business.

Morgan Stanley did not wish to comment.