StepStone Group has led a multi-fund restructuring centred around a healthcare-focused general partner.
Investors in three funds managed by Ampersand Capital Partners were given the option to roll into a continuation vehicle with three remaining assets or sell to a group of investors led by StepStone, according to a statement.
The oversubscribed continuation vehicle closed on $670 million, $70 million of which is follow-on capital to support the growth of Confluent, the largest asset in the fund. Secondaries and primary investors backed the deal.
Ampersand founder Rick Charpie in the statement: “With an initial five-year term, and access to capital for additional acquisitions and secondary purchases, [continuation vehicle] AMP-CF positions Confluent’s management and investors to continue taking a long-term view of the company’s future growth opportunities.”
Pricing details were not disclosed in the statement.
Confluent is a designer and manufacturer of complex medical devices. StepStone partner Adam Johnston told Secondaries Investor that the company accounts for 90 percent of the net asset value of AMP-CF, with biologics businesses bioventus and LakePharma making up the remainder.
Ampersand first explored a single-asset process on Confluent in early 2020, Johnston said. He added that the firm ended up choosing a “more holistic” multi-asset deal, which gave it more time to manage the asset, offered LPs a liquidity option and allowed it to wrap up its 2006- and 2011-vintage funds. Johnston described the performance of the assets and GP as “remarkable”.
As much as 25 percent of LPs rolled all or part of their holdings into the new vehicle. Johnston said this was more than has typically been the case recently as lower distributions from PE portfolios have compelled many LPs to sell.
Investors in the three funds include New York City Employees’ Retirement System, North Carolina State Treasury and The University of Texas/Texas A&M Investment Management Company, according to PEI data. It is not clear whether these LPs sold or rolled.
Johnston said StepStone can lead GP-led deals in “true proprietary situations” of $600 million to $700 million and below. The firm also participates as a syndicate investor in larger deals.
In April it held a $2.1 billion final close on StepStone Secondary Opportunities Fund IV against a $1.25 billion target.