Secondaries specialists commit to debut energy transition fund

Secondaries investors – such as Kline Hill Partners and North Sky Capital – can make primary fund commitments for a number of reasons.

Secondaries-focused investors Kline Hill Partners and North Sky Capital have committed capital to the debut fund focusing on the energy transition.

Magnesium I – a buyout strategy managed by Magnesium Capital – hit its €135 million hard-cap in April. The firm was co-founded by Ian Jones, a longtime senior executive at Apax Partners, and Matts Lundgren, a former technology executive.

The commitments were detailed in UK regulatory filings.

While the new LPs specialise in secondaries, a Magnesium spokesperson told affiliate title New Private Markets they had not acquired their interests in a secondaries transaction. The investors came on board in March, per the filing, before the fund closed to primary commitments.

The filing also lists Australian asset manager Perpetual Asset Management as a new LP. The size of the commitments was not disclosed.

Secondaries buyers make primary commitments for various reasons. Commitments can give buyers access to dealflow and information, and having an edge in an increasingly competitive market can be key to winning a deal. A buyer could also make a secondaries purchase that’s structured in the form of a primary commitment by committing to a fund that is still in fundraising mode and has already invested in assets.

A spokesperson for North Sky Capital confirmed that its latest impact secondaries fund, Clean Growth VI, is a limited partner in Magnesium I. “We believe Magnesium’s focus on fast growing and profitable lower middle market companies is a particularly fragmented area of the impact market where a much smaller amount of impact funds have focused to-date.”

Kline Hill did not respond to NPM‘s request for comment.