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TDR runs strip sale on 2013-vintage buyout fund – exclusive

Landmark Partners is set to back the deal which involves a slice of assets from the firm's €2.1bn Fund III, Secondaries Investor has learned.

Landmark Partners is set to back another secondaries process with TDR Capital, three months after investing in a single asset restructuring on the buyout firm’s 2007-vintage fund.

The Simsbury-headquartered firm is working with TDR to acquire a slice of assets from its €2.1 billion 2013-vintage TDR Capital III fund, according to two sources familiar with the matter. The process involves moving a strip of the assets into a new vehicle with reset terms and limited partners in the vehicle will receive cash back.

It is understood TDR is not working with an advisor on the process.

LPs who have committed to Fund III include Abu Dhabi Investment Authority, Australia’s HESTA Super Fund and Norinchukin Bank, according to PEI data.

Landmark has worked with TDR on secondaries processes before. In October, Secondaries Investor reported that Landmark and Goldman Sachs Asset Management were backing a deal to move Stonegate Pubs, the sole remaining asset in €2.2 billion 2013-vintage TDR Capital II fund, into a new vehicle.

Rede Partners is understood to have advised on that transaction.

In 2016 the firm provided a proportion of €835 million in follow-on capital to develop the assets in TDR II and made a stapled commitment to its successor.

UK regulatory filings also show the firm has acquired at least four stakes in TDR II from sellers including Neuberger Berman and UK firm Phoenix Life Assurance and American investor James Pallotta.

Strip sales, which involve offloading a portion of fund stakes or assets, are expected to continue this year. Speaking to Secondaries Investor in December, Ted Cardos, a partner at Kirkland & Ellis, said limited partners will begin to use this as a way to sell off part of their newer fund investments, including considerable unfunded portions, and cushion the impact of a likely downturn.

“This is a way for the larger institutional investors to hedge their position, but not completely walk away from managers they like and have confidence in,” he said. “It allows them to de-risk their portfolio and have some cash to weather the storm.”

Landmark and TDR declined to comment.