Whitehorse could raise as much as $6bn for latest vehicle

A hard-cap close on Fund V would push the preferred equity specialist up to $14bn in AUM just seven years after being founded.

Whitehorse Liquidity Partners will bring its assets under management up to at least $14 billion if it hits the hard-cap on its latest fund, US pension documents show.

The Toronto-headquartered preferred equity specialist has set a hard-cap of $6 billion for Whitehorse Liquidity Partners V, according to documents prepared for Pennsylvania Public School Employees’ Retirement System. The fund’s target is $5 billion.

Whitehorse had $8 billion in assets under management as of last June, according to the documents. Funds I to IV have generated a blended internal rate of return of 23.1 percent and a net multiple of 1.24x as of 30 June.

The firm has four pillars to its investment thesis, Secondaries Investor reported in June 2020. It can:

  • Provide preferred equity to allow LPs to generate liquidity from their portfolios without having to sell;
  • Purchase portfolios outright, split them into preferred- and common-equity tranches and syndicate the common equity;
  • Offer fund-level liquidity to GPs to invest in portfolio companies;
  • Inject liquidity into GP management companies.

Whitehorse estimates an addressable market of $90 billion to $135 billion and growing, according to the documents.

Consultant Aksia recommended that PSERS commit $200 million to Fund V. It committed the same amount to Whitehorse’s 2020-vintage Fund IV, which closed on $4 billion. The commitment falls in the specialty finance bucket of the pension’s private credit portfolio.

Other investors in Fund V so far include Minnesota State Board of Investment, which committed $100 million, according to Secondaries Investor data.

There was $7.8 billion of preferred equity deal volume last year, in line with 2020, according to research by investment bank Evercore.

Whitehorse did not return a request for comment by press time.