StepStone leads on $762m Australian secondary deal

The innovative transaction involves StepStone providing funding for MLC Private Equity's seed portfolio and additional capital for its new investments.

StepStone Group has taken the lead on a $762 million secondary transaction involving assets held by MLC Private Equity, a division of Australian investment manager MLC Asset Management.

The transaction involves the creation of a new vehicle, MLC Private Equity Partners, which will hold about $632 million of mid-market PE fund positions and co-investments across North America, Europe and the UK, according to a statement shared with Secondaries Investor. The assets span across sectors including IT, healthcare, technology and consumer.

The vehicle also raised $130 million of fresh capital, which MLC Private Equity will use to back new private equity funds and co-investment opportunities in the mid-market, the statement added. Campbell Lutyens advised on the transaction.

MLC Asset Management US will manage the vehicle, with StepStone, investing in both parts of the vehicle, serving mainly as capital provider, Secondaries Investor understands.

The continuation fund transaction “attracted a select group of prominent global institutional investors alongside StepStone Group”, MLC Private Equity’s co-head Marek Herchel said in the statement. He added that the deal “speaks to our ability to offer access to differentiated investment opportunities within our global private equity capability, leveraging our highly skilled investment teams in Sydney and New York”.

MLC Private Equity manages A$5 billion in assets ($3.22 billion, €3.03 billion) as of December, according to the statement. It has committed nearly A$10 billion to private equity funds and co-investments across over 100 global fund relationships since its launch in 1997.

Campbell Lutyens recently advised Northwestern Mutual Capital in its partnership with Carlyle’s AlpInvest Partners. AlpInvest agreed to buy stakes in private equity fund interests held by Northwestern Mutual, which will retain exposure in those funds, affiliate title Buyouts reported last month. The fund interests will be moved into a joint venture vehicle in which management responsibilities will be shared between AlpInvest and Northwestern Mutual Capital.

Northwestern Mutual is able to use proceeds in various ways, including building up its co-investment programme, which invests directly into sponsor-backed mid-market companies, sources said.

LP portfolio sales led secondaries activity last year, tallying an estimated $56 billion of the $111 billion total volume last year, according to Campbell Lutyens’ 2024 Secondary Market Overview.