Portfolio Advisors buys into GMT Fund III via auction

Some limited partners have sold their positions in GMT Communications Partners‘ Fund III to Portfolio Advisors, according to UK regulatory notices.

The transaction comes months after Lexington Partners and Newbury Partners led the restructuring of GMT’s previous fund, 2000-vintage $365 million Fund II. 

Portfolio Advisors won the Fund III stakes through a competitive auction process, a source familiar with the matter told Secondaries Investor. 

European investment manager Access Capital Partners was one of the LPs involved in the sale. The firm was unavailable to comment by press time. Other sellers include Delaware-registered investors Omnium Private Equity, Sumac Private Equity and Allocation Europe, UK filings disclosed. Little is known about the sellers, and principals were not reachable by press time.

GMT Fund III is a 2006-vintage buyout vehicle that raised €342 million, according to PEI’s Research and Analytics division.

Fund III is fully invested, having acquired eight Western European companies in the media, technology and telecommunication sectors. The latest deal was in Dutch internet services company IT-Ernity, which the firm acquired in 2013.

The fund sold its first investment in Finnish customer database service Asiakastieto in 2008 to alternative investment manager Investcorp. The sale generated an internal rate of return of 70 percent in less than two years, according to GMT’s website.

The fund also exited online gaming company Bigpoint to a consortium of private equity firms including Summit Partners and TA Associates in 2011. The sale generated a 4x return on the original investment.

GMT’s predecessor fund was restructured in July last year to allow the remaining three assets to achieve full value, according to a source familiar with the matter. The new fund structure provided LPs with the option to sell their stake, roll their interest into a new fund or maintain their position. About 25 percent decided to roll over into the new fund, GMT managing partners Timothy Green and Jeffrey Montgomery have previously said.

A source familiar with the matter previously told Secondaries Investor that GMT had to repay commitments worth more than €10 million.

The firm had been considering restructuring the fund since the end of 2012, after it received two fund extensions and had offered to waive management fees. Park Hill Group helped manage the process.

GMT declined to comment.