Are GP recycling provisions getting more burdensome for LPs? Secondary flood gates poised to burst open, Thomas H. Lee invests in digital health company Seniorlink

Thomas H. Lee Partners agrees to buy Seniorlink and secondaries could hit an uptick in activity.

Happy Friday!

Hope you had a good week. Going to be a hot one in NYC area this weekend.

It’s rumor Friday! Here are some issues I heard about this week that I’ll be working to develop further next week. Let me know if you’ve heard similar things at

Recycling: We know that GPs have been asking for amendments to existing fund contracts to allow them to recycle proceeds from investment sales into older investments. They wanted to do this to either support older investments that needed additional capital in the downturn, or to find add-on opportunities at great value during the crisis. I wrote about this trend a few months ago here.

Recently I heard that some of the recycling amendment requests that have come through have become a bit more burdensome to LPs. While they started out “mild,” as often happens, managers will push to see just how much they can get before LPs push back. I’ve heard of a few examples of GPs getting recycling amendments approved that allow them to recall distributions from older funds, so going back a few years.

Some LPs can handle this type of request better than others, for example sovereign funds with large pools of capital they can tap into to fulfill such requests.

This type of situation was described to me as “egregious” and rare. Interesting to see if more GPs ask for this type of amendment.

Also …

Hearing that more GPs are going back to older fund LPs and asking if they want to contribute to annex funds. These are pools of capital raised strictly to support an older fund portfolio, again both to provide capital to companies that need support, and to seize on new investment opportunities for add-ons.

Annex funds were popular in the global financial crisis around 2009, but they hadn’t really emerged in the early days of the pandemic downturn. In recent weeks though, sources told me they’ve started to see GPs trying to raise annex funds. Such requests mostly seem concentrated around firms that invest in troubled industries like retail, hospitality and travel, sources told me.

LPs haven’t necessarily been enthusiastic about committing into annex funds, which can seem like new capital chasing troubled investments. Some annex funds even come with fees, which seems counterproductive.

Top Scoops
Meanwhile, in secondaries land — we’re been hearing about a steady uptick in deal activity hitting the market. Seems only a couple weeks ago the DeVos family secondary sale was the one thing going on in secondaries (that’s not quite true … see here and here). But in the past two weeks I’ve heard of a couple billion-dollar LP portfolios poised to hit the market, and a host of GP-led deals either coming to market or being prepped to go live after Labor Day.

Seems like the secondary flood gates are starting to strain from the pressure. We could see it burst open come the fall. Of course much will depend on the course of our gradual recovery and where second quarter marks shake out.

Thomas H. Lee Partners agreed to buy Seniorlink at a purchase price that represents a high-teens multiple of Ebitda, writes Sarah Pringle on PE Hub. Seniorlink provides caregivers with education, support and case management services to help care for loved ones with complex needs or chronic conditions in the home, she writes. Read more here on PE Hub.

Have a great weekend! Reach me with your thoughts, tips, gossip, whatever at, on Twitter or find me on LinkedIn.