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Quadriga LPs mull fund restructuring – exclusive

The German manager is seeking up to four years to be able to maximise the value of its remaining assets, Secondaries Investor has learned.

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Investors in Quadriga Capital‘s 2006-vintage buyout fund have been sounded out about a restructuring, Secondaries Investor has learned.

The deal would be worth around €100 million and involve a “concentrated pool” of small-cap and mid-market assets from Germany and other parts of Central Europe, according to three sources familiar with the transaction.

According to a memorandum sent to investors by an asset management firm, extracts of which have been seen by Secondaries Investor, Quadriga believes it will need a three- to four-year extension on its €525 million Quadriga Capital III in order to achieve maximum value from its remaining assets. The fund has two years left of its original life.

It is understood that Park Hill is running the process.

Quadriga III held a final close in February 2007, according to PEI data. Limited partners in the fund include New York State Teachers’ Retirement System, Virginia Retirement System, the European Investment Fund (which committed €40 million) and HarbourVest Partners.

According to Quadriga’s website, remaining assets in the fund include Ipsen, which develops heat treatment solutions for metal parts; meat logistics company Vpool; and Kinetics, which produces high-purity gases and piping networks.

One limited partner in Fund III described it as “not a top quartile fund” while another said a “mixed outlook on the GP” is an obstacle to a successful restructuring.

In February 2013 Quadriga held the final close on €511 million for its fourth fund. Investors  in that fund included Virginia Retirement System with a $50 million commitment, New York State Common Retirement Fund with $10 million and Alaska Permanent Fund with a $14.3 million commitment, according to PEI data.

The process on Fund III is one of at least two restructurings in the market involving a German general partner. In late July Halder, another mid-market specialist, invited bids on the restructuring of its €325 million Halder-GIMV Germany II fund.

Quadriga Capital and Park Hill did not return requests for comment.