PE HUB Wire Highlight, 5.11.18


private equity
Private Equity Editor Chris Witkowsky reflects at home. Photo by Wendy Witkowsky

Investors don’t ask managers about sexual harassment, Investors look for opportunities to partner with fundless sponsors

Happy Friday!

It’s Chris, capping off this gorgeous May week. Next week I’ll be heading to Washington, DC for the EMPEA/IFC annual global private equity conference – one of my favorite events of the year. There’s nothing like Washington in the spring. Let me know if you’re going.

Fundless: Spending most of my time chatting with LPs about what they’re seeing in the market, I generally hear about new funds and interesting products GPs are working on. I also hear a lot about new firms trying to raise their first funds.

Lately though sources have been telling me about executives coming out of bigger shops or banks forming independent sponsors. LPs these days seem a lot more receptive to getting into business with fundless sponsors. Sort of like co-investments, this relationship gives LPs direct exposure into a deal on what are likely very friendly economics.

This week I wrote about a former Goldman Sachs private equity executive, Gilbert Klemann, who left the bank earlier this year and formed GHK Capital Partners. The firm is working on closing its first deal and is exploring other opportunities. Klemann eventually wants to raise a traditional PE fund. Check out my story here.

LP power: When asking about sexual harassment in private equity, I hear a common refrain that change needs to come from limited partners. The people controlling the money can put maximum pressure on managers to change their cultures, address sexual harassment and make sure these types of issues get some focus through the ranks.

The unfortunate fact is that LPs have not put much, if any, focus on digging out incidents of sexual harassment. This silence helps protect senior executives who should be booted out of a firm for inappropriate behavior…

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