Siguler Guff has hit the hard-cap on its first dedicated secondaries fund and plans to hold the final close in mid-November, Secondaries Investor has learned.
The New York-headquartered investment firm has raised $300 million for Siguler Guff Secondary Opportunities Fund (SOF), according to a source familiar with the fundraising. It is understood the fund, which had a $250 million target, was twice oversubscribed after about a year in market.
Investors who have committed to the fund include the New Mexico Educational Retirement Board, which invested $50 million, according to PEI data.
Terms for SOF, which focuses on distressed and special situations sub-strategies, were disclosed in a presentation to Contra Costa County Employees’ Retirement Association‘s 26 October board meeting.
SOF charges a 1 percent management fee on committed capital and 1 percent on invested capital. The fund, which has a 12.5 percent carried interest and an 8 percent hurdle rate, will invest for three years from final close.
The firm believes the percentage of LP interests transferred to secondaries buyers will grow to as much as 12 percent of primary inventory over the next three to four years, according to the documents. It pointed to increased numbers of secondaries players, regulatory changes, portfolio rebalancing, a focus on core relationships and limited partners’ increased familiarity with the space as drivers for the rise.
SOF will focus on three types of special situations opportunities: out-of-favour managers and ‘fallen angels’ (funds in asset classes that experience unexpected distress such as financials, media, shipping or power); traditional distressed managers; and side pocket liquidations, including private equity managers with hedge fund products, according to the documents.
The fund had made eight investments as of 30 June, the largest of which – a $72.3 million deal made during the first quarter of this year – has generated a 1.2x multiple on invested capital (MOIC).
Siguler Guff had achieved a 1.42x portfolio-level MOIC and a 51.4 percent portfolio-level internal rate of return through its secondaries deals as of 30 June, the documents show.
The firm has more than $10 billion of assets under management and has offices in eight global locations, according to PEI data.
Siguler Guff declined to comment.