I guess the relatively slower start to the year we were feeling back in early January is a long-gone dream at this point. Activity has picked up to a frantic level, whether it’s fundraising or secondaries, M&A or what-have-you.
Not that fundraising is back to normal levels or by any means opening up more … just that we’re seeing a good crop of expected funds starting to hit the public systems. These are the funds that I imagine LPs have budgeted for that are going to take up most of the LP allocation for the year, leaving little to nothing for new relationships or unexpected funds hitting later this year.
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Exit: Arbor Investments agreed to sell Red Collar Pet Foods pet treats factories in Miami, Oklahoma to Nestle Purina PetCare. Last year, the firm sold Red Collar’s dry kibble pet food manufacturing business to Colgate-Palmolive Co.
Arbor launched Red Collar in 2018 after acquiring the private label pet food and treats manufacturing business from Mars Petcare through its fourth fund. Red Collar then added-on Hampshire Pet Products in Feb. 2019, adding baked treats to the platform.
People move: Vista Equity’s mid-market focused Foundation fund strategy is going through another leadership shift, with co-head Marc Teillon stepping back into a senior adviser role.
Vista named operations veteran Martin Taylor as co-head of the Foundation funds alongside Patrick Severson. Taylor has been with Vista since 2006 and was the first president of Vista Consulting Group. He helped establish the firm’s executive community and engagement programs, according to a letter to limited partners.
Taylor is the latest in a series of leadership shifts on the Foundation funds in recent years. In 2021, former Foundation co-head Rob Rogers stepped out of leadership and the firm appointed Severson to run the strategy alongside Teillon. In 2019, Teillon stepped up to co-lead the Foundation strategy, replacing Alan Cline, who was moving over to help lead the firm’s small-market Endeavor strategy. Cline also stepped into a senior adviser role and eventually left the firm.
Big’ un: There’s a whale in the secondaries market! Kaiser Permanente, a regular seller on the secondary market as it dials back the frenetic growth of its private equity portfolio, is shopping a portfolio of fund stakes of up to $6 billion, sources told me.
Kaiser is working with PJT Park Hill on the sale. Sources said they don’t expect the entire portfolio to transact; rather, as has become the trend these days, a host of buyers will pick off specific funds in what secondaries insiders call a mosaic sale.
The challenge for selling LPs is pricing, which has been at a general discount to NAV in the market dislocation. LPs have not been comfortable selling at discounts; however, that sentiment appears to be changing, sources said.
“It has less to do with optical pricing than it has to do with LPs wanting to feel like they know where valuations are heading,” a secondaries buyer told Buyouts. “What we’re seeing is LPs willing to accept discounts. LPs are selling. There’s a lot to look at right now.”
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