Dyal Capital eyes $1bn loan to pay back investors in Fund III, Texas Teachers completes sale of large PE stakes, Lightyear Capital to invest in Health Plan One

Dyal Capital is closing in on a $1 billion loan and Lightyear Capital backs Health Plan One.


Hope all is well with you and yours.

This is interesting: Dyal Capital Partners is apparently using debt to pay back investors in Fund III. The firm is closing on a $1 billion loan against the fee revenue of firms in which it acquired stakes in the third fund, according to Reuters. Dyal will use the proceeds to pay back investors in the pool, Reuters said.

Dyal has been exploring options for its third fund, including selling a strip of assets from the pool, Buyouts reported in March.

The firm had been in talks with PJT Park Hill about working on some sort of secondary deal at the time. It’s not clear if those talks ever went anywhere. Park Hill’s head of secondary advisory, Jonathan Costello, left the firm in May to form his own buyside secondaries shop with the backing of Stone Point Capital.

Dyal, backed by Neuberger Berman, closed Fund III on $5.3 billion in 2017. The fund has investments in Vista Equity Partners, EnCap Investments, Silver Lake, H.I.G. Capital, Starwood Capital Group and KPS Capital Partners, among others.

The third fund was Dyal’s first that focused primarily on buying passive, minority stakes in private equity management companies. Earlier funds focused on hedge funds.

A potential sale out of a relatively young fund has raised eyebrows in the market that is dominated by Dyal, Goldman Sachs’s Petershill Group and Blackstone Group.

Dyal has stressed that it is happy to hold its GP stakes investments for the long term. Dyal gets paid by taking a share of cash flow, including fees and carried interest. So as long as firms are generating fees and carry across multiple funds over time, Dyal’s investments will be productive for the firm.
Read more.

Move: Alberta Investment Management Corp named Mark Wiseman as director and chair of the board of directors effective July 1, 2020. Wiseman was formerly president and CEO of Canada Pension Plan Investment Board and global head of active equities for BlackRock. He also worked as chairman of BlackRock Alternative Investors.

Long ago, Wiseman ran private equity and co-investments at Ontario Teachers’ Pension Plan. Read the news brief here.

Top Scoops
Teacher Retirement System of Texas completed a large secondary sale around the end of the year, selling between $1 billion and $2 billion of interests in private equity funds, I wrote on Buyouts. The pension system had targeted a sale of up to $3 billion last year.

The sale included large stakes in a few large managers, sources told me. Check out my story here.

We have a guest column from Jennifer Prosek, founder and CEO of public relations firm Prosek Partners. Read the full piece here. Check out a sample:

1. Investor Meetings Go Virtual in 2020 and Beyond: Annual investor meetings planned for fall, winter and spring are going to be largely virtual with heavy spending on video, live streaming and new platforms to bring the offline online. Increasingly, firms are communicating directly with LPs and investors through pre-recorded webinars and LinkedIn “Live” events, leveraging social platforms and email marketing to secure high-level attendees wary of travel.

2. Deal Makers Need to Remain Visible: Deal makers are improving their online visibility with increased spending on content and social programs on platforms like LinkedIn, Twitter and YouTube. Firms that once let their deals do the talking, now recognize the commercial importance of proactive thought leadership, social content programs and search engine marketing to ensure their messages reach critical founder and investor audiences.

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cwitkowsky@buyoutsinsider.com, on Twitter or find me on LinkedIn.