Exits: GPs are heading for the exits, scrambling to sell assets before year-end amid fears of tax increases under the Democratic-controlled Congress. However, deal activity is so frenetic some advisers are telling clients to just hold off until next year.
“I have heard people being told that after Labor Day, don’t even think about selling or starting a fund – it is way too busy right now and you will have a hard time being seen – we are advising you wait until first or second quarter of next year,” said a panelist at our PartnerConnect East even this week in New York.
Jon Gray, Blackstone’s president, said this week the firm is selling assets to take advantage of liquid markets, agreeing with the sentiment earlier expressed by Brookfield Asset Management chief executive Bruce Flatt.
Gray said it’s a good time to explore exits before the Federal Reserve slows its bond-buying program, which could drive up long-term interest rates, according to Bloomberg.
GPs have more options than ever when exploring an exit, beyond just traditional M&A processes or public filings. The rise of SPACs, and single-asset secondary deals, have also become popular options for sellers, panelists at the conference said.
Free bird: Big scoop from Kirk Falconer this morning. Robert Covington, a partner with RedBird Capital Partners, left in August to form Braemont Capital, which has secured just over $300 million, Kirk writes. RedBird’s founder and managing partner, Gerry Cardinale, was supportive of Covington’s plans, he said. Read the full story here on Buyouts for details.
Stakes: RidgeLake Partners, formed by New York Life Insurance Co-backed PA Capital and Ottawa Avenue Private Capital (the investment firm of the DeVos family), acquired a stake in the management company of Gauge Capital.
RidgeLake last year acquired a minority stake in Newbury Partners. RidgeLake is headed by Michael Lunt, an Ottawa Avenue managing director, and Todd Milligan, a managing director at PA Capital. The firm was seeded with $500 million by the parent organizations of PA and Ottawa Avenue, Buyouts previously reported.
Ottawa Avenue is indirectly owned by the family of Richard and Helen DeVos, according to the firm’s ADV filings. Richard’s son Dick is married to Betsy DeVos, née Prince. Ottawa Avenue also invests minority capital on a direct basis, backing Europe’s Nordic Capital.
Ottawa Avenue shopped a portfolio of PE fund stakes worth up to $1 billion and perhaps as much as $2 billion, Buyouts reported in July. The secondaries process drew HarbourVest Partners as a lead investor, the report said.
That’s it for today! Hit me up with tips n’ gossip, feedback or The Drama at email@example.com or find me on LinkedIn.