DuPont Capital takes turnover in stride, stays steady on PE approach

After a handful of senior departures in its private markets team last year, DuPont Capital says it is back to full strength and business as usual.

DuPont Capital manages both the DuPont Pension Trust and fund-of-fund products for other investors, with $1.9 billion in private equity assets under management, as of the fourth quarter of 2018. Its private market team saw three departures in 2018, including Kevin Campbell, former managing director of the private-markets team for the company’s private pension fund, Eric Wilcomes, a portfolio manager, and Howard Searing, a portfolio manager. The firm’s overall exposure to private equity as also declined, from $3.6 billion in 2015.

The staffers who left were seasoned professionals, with a combined 65 years of PE experience between them. Campbell, Searing and Wilcomes were listed as the first three names on DuPont’s quarterly update of its private markets program earlier in 2018, followed by Chris Pettia and Daryl Brown, who remain with the firm as portfolio managers. The firm’s private markets snapshot now lists Antonis Mistras, managing director, alternative investments, Pettia and Brown, along with analysts Joseph DeYonker and Dawit Kass.

Mistras told Buyouts that DuPont Capital has finished hiring to replace the departed staff, and that it intends to stay the course on private equity investments.

“We believe that the main strength of our investment process is the process itself,” Mistras said. “We’re not a system of star investors, we are a machine in some sense. We have an engine.”

That process involves a focus on the lower middle market, looking for managers with a disciplined focus on both value at purchase and value-creation during a hold period, Mistras said.

“We want to invest in funds that are disciplined, that pay attention to valuations,” Mistras said. “We want also to find the funds that have a very well-stated and proven way of creating value, not just going out on a shopping spree and building up market share through acquisitions. We want funds that have a proven way of improving operational efficiencies, improving the know-how by bringing in experience that the portfolio company may lack. Most importantly, we’re looking at performance.”

In private credit, DuPont is taking a conservative approach, being careful not to chase yield and add too much risk in the asset class, Mistras said.

Mistras said DuPont doesn’t have rigid pacing targets. “We’re not going to go crazy, and we’re not going to go dry,” Mistras said.

DuPont has raised four funds-of-funds, with the most recent raised in 2014. The firm does not have immediate plans to raise a fifth fund, but has a team in place that will be ready when the time is right, Mistras said.

“While we’re not actively fundraising, we are continuing in the sequence of funds,” Mistras said. “We don’t have a date for Fund V. That’s in the works, and we’re trying to determine the right time for the next fund.”

Corrected: This article has been updated to correct the spelling of Mistras’ first name.

Action Item: Check out DuPont Capital’s Form ADV here: https://bit.ly/2XPuXsT