StepStone leads on $175m insurance-focused continuation fund

StepStone Group has taken the lead on a continuation fund transaction involving five assets in the insurance industry.

Hudson Structured Capital Management, a Connecticut-based alternative asset manager focused on the insurance and transportation sectors, has moved its stake in five life insurance investments held by its multi-sector insurance-focused HSCM Bermuda Fund into a continuation vehicle, according to a statement shared with Secondaries Investor.

The continuation vehicle, HS Mohawk Fund I LP,  has received more than $175 million of capital commitments from StepStone and existing HSCM investors, who were offered “an option for near-term liquidity”, according to the statement. The continuation fund will support the assets’ continued growth, it added. PJT Partners advised on the transaction.

HSCM has named Gokul Sudarsana its chief investment officer for life insurance in addition to his role as chief actuary. Sudarsana joined HSCM in 2020 from Deloitte, where he led the accounting giant’s actuarial service offerings in Bermuda and the Caribbean, according to the firm’s website and his LinkedIn.

HSCM has accumulated $3.4 billion in AUM since its launch in 2016, according to data from affiliate title Private Equity International.

“This transaction serves as a testament to our goal of partnering with best-in-class sponsors to provide capital solutions for their highest-quality assets and liquidity options for existing investors,” Geoff Dolan, partner at StepStone, said in the statement.

GP-led secondaries have become an increasingly established exit path for LPs amid the scarcity of more conventional exit options.

Continuation vehicle transactions are expected to account for 9 percent of total PE distributions to LPs in 2023, according to data from investment bank Baird. This figure has seen a consistent annual increase since 2016 and is up from 5 percent in 2022.