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New 2ND Capital leads growth fund restructuring

The process involved moving five assets from Vicente Capital Growth Equity Fund into a separate vehicle.

New 2ND Capital, the Tjarko Hektor-led firm which closed its debut fund in March, has led a GP-led process on a crisis-era growth equity fund.

The secondaries firm, founded by AlpInvest Partners‘ former managing director, has backed the $134 million restructuring of Vicente Capital Growth Equity Fund alongside investors including Altamar Capital Partners, according to a statement.

The deal involved five assets being moved out of the 2008-vintage fund into continuation vehicle Vicente Capital Partners Long-Term Appreciation Fund. Evercore advised on the process.

The five assets are software companies SMT and ITI, translation services firm Global LT, educational recruitment firm Archer Education and healthcare services business MedBridge Healthcare, all based in the US.

Jay Ferguson, co-founder and managing partner of Vicente Capital Partners, said in the statement: “This secondary transaction will generate a gross 1.92x MOIC for Vicente Capital Partners Growth Equity Fund, LP, investors. The five remaining companies … will have additional time and capital to achieve enhanced returns.”

Vicente Capital Growth Equity Fund raised $165 million, against a target of $150 million, by final close in 2009, according to data from sister publication Private Equity International. Investors in the fund include the California Public Employees’ Retirement System, which committed $40 million, and Connecticut Retirement Plans and Trust Funds.

The Los Angeles-based firm takes control and non-control positions in companies in the business services, consumer services and specialist manufacturing sectors. It has not raised a follow-up fund.

Vicente Capital Growth Equity Fund had delivered a net internal rate of return of 6.7 percent and a multiple of 1.4x as of 30 June 2019, according to data from CalPERS.

New 2ND Capital Fund I raised $294 million by final close in March 2019, exceeding its target of $250 million, Secondaries Investor reported. Hektor founded the firm in 2016 after 16 years with AlpInvest.

New 2ND focuses on GP-led transactions in the North American small- and mid-markets, including spin-outs, restructurings, direct secondaries and the acquisition of co-investment portfolios.