Providence looks to cash out LPs in Fund VII; Abraaj seeks provisional liquidation; Warburg makes nearly 4x on FacilitySource
It’s Thursday, Hubsters.
GPs selling minority stakes to outside investors has become a common theme in private equity. One group, however, isn’t so fond of the trend. According to a survey from Coller Capital, nearly two-thirds of LPs questioned, or 64 percent, have not invested in funds that invest in GP stakes. These LPS are also unlikely to invest in such pools in the future, the survey said. However, there’s also LPs who like these deals. Seventeen percent of investors questioned said they’ve already invested in such funds and another 19 percent will consider doing so.
Minority-stake sales are big business. Some of the largest PE firms have sold stakes, including Vista Equity Partners, Leonard Green & Partners, Silver Lake and Cerberus Capital Management. Clearlake recently sold a chunk to a club of outside investors. Golub Capital, one of the biggest middle market lenders, is considering selling a minority stake. But not everyone likes these sort of deals. In 2016, New Mexico State Investment Council declined to commit to a Dyal Capital Partners fund, which buys up such stakes.
LP do appreciate other trends, like secondaries. Find out more by reading Eamon Murphy’s story here.
We’ve asked you before and we’ll ask again. Hubsters, what do you think about minority stake sales? Is your firm thinking about doing a minority stake sale? Why or why not? Has the trend become acceptable? Email me here at [email protected]
Sale: Clovis Point Capital earlier this month exited portfolio holding MediaPro after Frontier Capitalrecapitalized the provider of security, privacy and compliance awareness training. For Clovis, the MediaPro sale produced a nearly 5.3x return on invested capital and a 100 percent IRR, a statement said. Clovis, of Houston, is a lower middle market fund that is currently out fundraising for its second pool, I’m hearing. Fund II has a $75 million target. If you know more, drop me a line.
Deals: Warburg Pincus has been busy, busy. This morning, the New York PE firm said it sold Slickdeals, an online marketplace for deals and coupons, to West Street Capital Partners VII. That’s the PE fund from Goldman Sachs Merchant Banking Division and Hearst. Goldman raised $7 billion for West Street in 2017, Reuters reported. Read our brief here.
In other Warburg news, I have a story on their exit from FacilitySource. CBRE recently acquired FacilitySource for $290 million. Find out how well Warburg did on the deal here.
Bankruptcy: Abraaj Holdings has made it official. The Dubai investment firm has filed for provisional liquidation in the Cayman Islands. A court supervised liquidation would allow Abraaj to restructure its debt, negotiate with creditors and sell assets, Bloomberg said. It would also put a moratorium on Abraaj’s unsecured claims. See our brief here.
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