PE HUB Wire Highlights, 12.12.18


private equity, mergers, M&A
Private Equity Editor Chris Witkowsky reflects at home. Photo by Wendy Witkowsky

Seeding group considers outside capital, BrightSpring’s marriage with KKR’s PharMerica said to command $1.3-bln-plus valuation

Happy Wednesday!

U.K. Prime Minister Theresa May is facing a vote of no-confidence today from fellow conservative lawmakers. The threat to her leadership comes a few days after she delayed a vote on her compromise plan to exit the European Union. Check it out.

Third-party: Capital Constellation, a partnership formed by several sovereign funds, including Alaska Permanent Fund Corp, is considering allowing third parties to invest alongside it, according to an article in Institutional Investor. The partnership was formed to take ownership stakes in private investment firms.

Capital Constellation so far has invested in three PE managers: Astra Capital Management, Ara Partners Group and Motive Partners.

A Form D filing from Nov. 27 shows Capital Constellation raised $700 million from 13 investors. The group in February made an initial filing, which didn’t show any capital raised at that time. Capital Constellation, when it formed last year, planned to commit an initial $700 million and expected to deploy more than $1.5 billion over five years, Buyouts previously reported.

Other groups: Capital Constellation is one of several groups exploring opportunities to seed new managers. Earlier this year, Archean Capital Partners, a joint venture between Moelis Asset Management and Veritable, provided anchor backing to MiddleGround Capital, a spinout from Monomoy Capital Partners.

MiddleGround is targeting $350 million for its debut fund for investments in lower-middle-market business-to-business industrial companies in North America. Archean provided a $75 million anchor commitment that would bring the Fund I target to $425 million, I reported a few weeks ago.

The rise of such funds comes in one of the strongest fundraising markets for private markets, at a time when executives are choosing to leave larger shops and form their own firms. It’ll be interesting to see if this strategy keeps up in a downturn and a weakened fundraising market.

What kind of activity have you seen around seeding early funds? Reach me at cwitkowsky@buyoutsinsider.com.

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