StepStone spin-out targets $150m for VC secondaries

The firm founded by StepStone's former secondaries head had been investing on a deal-by-deal basis.

Sweetwater Capital Partners, an investment manager formed by StepStone’s former secondaries head, has launched a blind-pool fund.

The firm is seeking $150 million for Sweetwater Secondaries Fund II, a venture capital vehicle, according to a filing with the US Securities and Exchange Commission. It does not expect the offering to last more than a year.

Sweetwater was formed in 2016 to make secondaries, directs and co-investments across venture capital, growth, buyout and infrastructure on a deal-by-deal basis, through tickets of between $5 million and $15 million, as Secondaries Investor reported. The firm’s aim is to help less well-resourced limited partners such as smaller endowments and foundations gain exposure to private equity.

Sweetwater was founded by James Gamett, a former partner at StepStone who also spent four years at Portfolio Advisors. At inception Sweetwater hired Partners Group board member Brooks Lindberg and Joseph Siletto of Scion Investments as managing directors, as well as former StepStone employees Ron Heinz as principal and Cameron Rondo as senior associate, it said in a statement.

Heinz and Rondo remain, according to Sweetwater’s website.

In Greenhill’s 2018 outlook report the advisor noted general partners have been broadening their fund mandates to encompass non-buyout strategies. Venture capital stakes were the second most highly traded last year, accounting for 22 percent of the total, the report noted.

Sweetwater, which is based in San Diego, declined to comment.