A trend we’ve been following in private equity is that of GPs looking for ways to extend their hold periods over certain treasured assets.
We’ve seen that accomplished through secondaries continuation fund deals, through some GPs raising funds specifically to reinvest in their own portfolio companies out of older funds, and through traditional M&A processes.
One example this week: BC Partners decided to take another bite of the apple with CeramTec, which makes ceramic products for medical implants and industrial uses. The firm initially invested in CeramTec in 2018 through its tenth fund.
Last week, BC announced it was re-investing in the company through its eleventh fund alongside CPP Investments. Public Sector Pension Investment Board and Ontario Teachers’ Pension Plan, which invested alongside BC in 2018, will exit the investment as part of the new deal, which values CeramTech at about $4.5 billion, according to Bloomberg.
Meanwhile, Ardian’s president, Dominique Senequier, explained in the firm’s 2020 activity report that it is exploring extending its holds over some of its portfolio companies through the use of continuation funds.
“Where we believe portfolio companies have excellent growth prospects beyond our accustomed holding period, where we have a strong partnership with the management team and our interests are fully aligned with our LPs, we will offer them the opportunity to maintain their interest in the company through a continuation vehicle,” Senequier said.
Check out our page exploring the Long Hold trend here, where you can find our huge archive of past coverage. And hit me up with your thoughts on GPs efforts to hold certain assets longer at firstname.lastname@example.org or find me on LinkedIn.