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ORIX to join secondaries buyside with GP-led unit launch

The US subsidiary of the Japanese financial services conglomerate will initially invest off balance sheet before launching a third-party fund.

ORIX Corporation USA is building out a team to invest in mid-market GP-led secondaries deals, joining a growing list of asset managers planning to raise dedicated capital to back mid-market sponsor-initiated transactions.

The Dallas-headquartered financial services firm has hired Jed Johnson as managing director and head of the recently formed team, according to a statement. He will be based in Dallas and report to Jeff Abrams, chief investment officer, asset management.

Johnson comes to the role from multifamily office CH Investment Partners, where he was senior managing director and portfolio manager for private markets. Prior to that he spent a decade with lower-mid-market buyout firm Parallel Investment Partners and four years with tech investor Summit Partners, according to his LinkedIn profile.

The GP-led secondaries team will initially invest off balance sheet and plans eventually to raise third-party capital, the statement said. It will target deals across private credit, private equity and real estate. The team sits within ORIX’s Special Opportunities Group, which makes event-driven equity and credit investments.

“The secondaries market is an attractive sector that continues to gain momentum with significant transactional volume growth… Jed is a seasoned leader with demonstrated principal investment experience and a proven track record developing and executing successful private equity investment programs,” said Abrams in the statement.

ORIX USA has $26.5 billion in third-party assets under management in addition to $11.3 billion in proprietary assets and $47.2 billion of assets under servicing and administration. It is the US subsidiary of Japanese financial services conglomerate ORIX Holdings.

ORIX’s move follows that of other asset managers planning to raise dedicated capital for mid-market GP-leds: in October, Pantheon closed its debut fund dedicated to the strategy on $624 million. The previous May, LGT Capital Partners collected $1.5 billion for Crown Secondaries Special Opportunities II, which targets single-asset and concentrated deals.

The growth of GP-led funds has been stymied by the difficulty of convincing LPs that it is necessary to invest in both single-asset secondaries deals and co-investments.

“The mandate of most co-investment teams is to invest on a no-fee, no-carry basis, so if something comes along that’s not on that basis, they often can’t invest,” said Nigel Dawn, senior managing director at Evercore, speaking on a panel in the fourth quarter of last year.