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AlpInvest in market raising big secondary fund

  • Next-generation secondaries program could total $6 bln to $7 bln
  • Targets around $2 bln for commingled Fund VI
  • Big contribution to come from Dutch pensions

A major secondaries buyer is back in the market raising a pool expected to total $6 billion to $7 billion.

AlpInvest Partners, owned by Carlyle Group, is in the market raising AlpInvest Secondaries Fund VI with a target of around $2 billion, according to two people with knowledge of the firm. The balance of the pool would come from contributions from AlpInvest’s former parents, Dutch pension funds APG and PGGM, the people said.

The portion of Fund VI raised from investors beyond the Dutch pensions would mark a big jump from AlpInvest Secondaries Fund V, which collected $750 million from outside limited partners. Combined with contributions from the Dutch pensions, the prior secondaries pool totaled $4.2 billion in 2013.

What AlpInvest calls its “Secondaries Program” includes the commingled fund, contributions from its former parent pensions and separate account commitments.

Randy Whitestone, a spokesman for Carlyle Group, declined to comment. Carlyle Group bought a majority interest in AlpInvest in 2011 and bought up the remaining stake in 2013.

“Where we are very excited is really in the secondaries business,” said Carlyle Group Chief Financial Officer Curtis Buser during the firm’s third quarter earnings call. “So we’ll have a large secondary fund that AlpInvest is overseeing [and] that’ll come online here next year.”

Prior to its acquisition by Carlyle Group, AlpInvest was owned by the Dutch pensions, which committed money to the firm each year.

AlpInvest is one of the most active buyers in the secondaries market, buying both large portfolios and investing in GP restructurings. The firm is leading an investor group that is financing the restructuring of the first and only fund of Lee Equity Partners. Under the deal, the investor group would buy out LPs as well as provide additional capital for a bridge fund earmarked for new investments.

AlpInvest Managing Partner Wouter Moerel leads the firm’s global secondary efforts from Amsterdam, while Managing Directors Justine Gordon, Michael Hacker and Chris Perriello, along with 10 other investment professionals, handle investments in the Americas. AlpInvest has a 25-member secondaries team.

Earlier this year, AlpInvest lost Tjarko Hektor, the former co-head of its secondaries program. Hektor left for undisclosed reasons.

AlpInvest sits within Carlyle Group’s $51 billion Solutions Group, led by Jacques Chappuis. The group works on primary fund commitments, secondaries, co-investments and separate accounts on behalf of investors.

Action Item: Check out AlpInvest’s 2014 annual report.

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