AlpInvest loses executive who led efforts in buying GP minority stakes

  • Herchel was AlpInvest ‘point man’ on GP minority stakes
  • Firm was said to be raising $1.5 bln for strategy
  • No fund yet in market

Marek Herchel, who recently left AlpInvest Partners for MLC Private Equity, was the firm’s “point man” on the strategy of buying minority stakes in private equity management companies, three sources told Buyouts.

Herchel was head of North America fund investing, but he was also leading AlpInvest’s initial push into the GP-minority-stakes business, a strategy growing increasingly popular with large firms.

With Herchel having left, the focus on GP-minority-stake sales at AlpInvest falls to Sean Gallary, a managing director who heads the firm’s partnership team. Herchel hired Gallary earlier this year, sources said. On the funds side, Herchel’s role was taken over by Eric Hanno, who was promoted to managing director, Buyouts reported June 7.

AlpInvest, backed by Carlyle Group, was reportedly set to target $1.5 billion for a fund that would purchase minority stakes in GP-management companies, a Wall Street Journal article in October said.

So far, no fund has been launched for the strategy. Instead, AlpInvest is focusing on completing a few deals before heading to the market, sources said. The team will be able to draw on Carlyle resources to fund deals it finds, one person with knowledge of the process said.

Several sources said AlpInvest has competed for minority-stake sales but has not yet landed one.

Gallary joined AlpInvest earlier this year from Tunbridge Partners, which was formed in 2015 to acquire minority stakes in real estate and real asset-focused managers. Gallary, portfolio manager, led Tunbridge along with Chairman Brian Finn, a statement from the firm when it launched says. Tunbridge lists only one employee on its one-page website, Principal Keith Funston.

The strategy of buying minority stakes in PE-management companies has become popular, especially among large firms. Arguably, the leader in the space is Neuberger Berman-backed Dyal Capital Partners, which closed its third fund on $5.3 billion in February. Buyouts exclusively reported this week that Dyal launched its fourth fund, targeting $5 billion with no cap, in June.

Other firms that pursue the strategy include Goldman Sachs’s Petershill group, Blackstone Group, Hycroft and GP Interests.

Action Item: Check out AlpInvest’s Form ADV:

Locals float in a hot tub boat during the opening of the Amsterdam Light Festival in Amsterdam on Dec. 7, 2012. Photo courtesy Reuters/Michael Kooren