Pantheon: restructurings worth $70.5bn

There are 200 decade-old funds with an aggregate of $70.5 billion in net asset value (NAV) according to fund-of-funds manager Pantheon.

The firm said the $70.5 billion figure spans buyout, venture, mezzanine and distressed debt funds, growing to $86 billion across 870 funds ten years or older, if fund sizes were included below $100 million.

Pantheon partner Rudy Scarpa said the $70.5 billion figure could rise due to the large number of funds raised in 2006, 2007 and 2008 and the length of time GPs take to exit their investments.

“As of March 2014, we’ve identified exactly 200 private equity funds with at least $100 million of NAV that are at least ten years old, vintage 2003 or older, spanning across buyout, venture, mezzanine, and distressed debt,” said Scarpa.

“In fact, we’ve been able to identify 870 active funds that are at least 10 years old, but only 200 of these funds have an NAV of at least $100 million.”

High-profile restructurings last year included Motion Equity Partners, restructured by HarbourVest for $430 million; Berwin Capital re-capitalised for $880 million; and the restructuring of Willis Stein & Partners’ 2001 vintage $1.8 billion Fund III.

Scarpa added the prospect of a $70.5 billion pool of untapped business was an attractive opportunity for secondaries buyers in the market but required high levels of negotiations.

“General Partner recaps could be a viable solution for ageing funds that have fatigued LPs, GPs who are facing dwindling management fees and portfolio companies that require additional capital to grow,” said Scarpa.

“The key is structuring these transactions so that the objectives of all these different constituencies are met.”