What do you want to hear about, deals? People moves? We got it all …
Late breaker: Apollo Global Management announced that Josh Harris, who lost a power struggle to Marc Rowan to take the top spot of the firm after Leon Black decided to retire, will step out of day-to-day activities and focus on his personal projects, including his ownership of various sports teams and his family office. He’ll transition out next year. See Apollo’s statement here.
Holding assets longer: Have you been paying attention to the trend of GPs using single-asset secondary structures to pull certain assets out of older funds and into special purpose vehicles for more time and capital to manage the businesses?
It’s big, and it’s everywhere. GPs have figured out that this is a way to hold their best assets longer, rather than sell them off to other sponsors after three years at a time when the business has more growth. Why sell off now, when there is more growth to ride and ultimately, more return to be generated. Why take a return, and then watch the other shop take over and hit a 3x or 5x return a few years down the line?
“If you ask the managing partner or any partner frankly of a private equity fund if they have any regrets, what are they? Often they will tell you that they sold their best companies too early,” a secondaries adviser told me recently.
What’s unique about the rise of single-asset deals is the nature of the assets involved. Secondaries used to be a tool for GPs to sort out older funds, with some great companies and some more challenged situations. But these single-asset targets are often the best of the best in a GP’s portfolio.
Icon: Clearlake Capital is on the front lines of this movement, just wrapping up its fourth special purpose vehicle to hold its Internet certification and security services company DigiCert, which it backed in 2019 alongside TA Associates. Clearlake calls the single-asset vehicles its Icon series of funds.
Clearlake is moving DigiCert out of two older funds where it is held. LPs in those older funds have the option to cash out of their interest in the asset, or re-invest in the company in the continuation pool. TA, which first invested in DigiCert in 2012, will partially cash out and retain a stake in the company, sources said.
Read more here about Clearlake’s DigiCert single-asset process, which could be among the largest ever such deals.
India: India has been the focal point of coronavirus devastation over the past few weeks, as a second wave has swept through rural villages with little medical infrastructure, leaving some places as “ghost towns.”
For Indian-Americans with family and friend ties in India, the situation is devastating to watch from afar with not much ability to help. Indian-American dealmakers have sprung to action to try and help, writes Karishma Vanjani on PE Hub today.
For Indian-American bankers and investors, the continuing crisis, killing more than 4,000 Indians per day, hits close to home. In the absence of an organized Indian-American community of investors, bankers or asset managers, individuals are frantically gathering resources and actively supporting local and Indian-American charities.
“The only way to cope with it [the catastrophe] is to kick into action,” said Hans Taparia, co-founder at Desert Bloom, a food investment vehicle funded by family offices and firm executives.
“We all need to feel useful in some way,” said Taparia, whose family has ties in India. “If we are not doing something it eats at us.” Read more here.
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