Jordan Co explores liquidity options for LPs in older fund

  • Jordan Co. closed Fund II on $3.6 bln in 2007
  • Working with boutique adviser M2O
  • Process could include Fund III

Jordan Co is exploring liquidity options for its second fund, and possibly its third fund, to enable existing investors to cash out, sources told Buyouts.

Jordan Co, formed in 1982, would be another in a series of high-profile private equity managers using the secondary market to deliver liquidity to investors in its older funds.

The market is on track to break deal-volume records this year if activity remains strong through 2018, multiple sources told Buyouts.

Whether Jordan Co has an official process in the market or it’s still in the exploratory phase is unclear. 

The firm is working with boutique adviser M2O Private Fund Advisors, sources said. M2O, which spun out of Jefferies & Co in 2012, earlier this year hired Mike Custar, former global head of secondaries advisory at Credit Suisse. 

The process could also include a shot of fresh capital into Fund IV, which has been in the market targeting $3.2 billion, sources said.

Fund IV was expected to hold a final close in March, an investment report from Nebraska Investment Council shows. It’s not clear whether that fund has closed or is still in market. 

No one from Jordan Co or M2O returned requests for comment.

Jordan Co closed Resolute Fund II on $3.6 billion in 2007. It closed Fund III on $3.2 billion in 2014. Formed in 1982 to invest in the middle market, Jordan Co raised its first Resolute Fund in 2002 with $1.5 billion.

Fund II was generating a 1.49x total value multiple as of March 31, 2018, according to New Jersey Division of Investment.

Fund III was producing an 18.9 percent internal rate of return as of Sept. 30, 2017, California State Teachers’ Retirement System data shows.

Jordan Co was formed in 1982 by Jay Jordan, who is chairman, and David Zalaznick. As of Dec. 31, 2017, Jordan Co managed about $5.6 billion.

Jordan reduced his role in day-to-day operations in recent years, turning over more control to Chief Executive and Partner Rich Caputo. In addition to Caputo, Jeb Boucher and Adam Max are managing partners. 

Other longtime managers are exploring secondary processes as well this year. Providence Equity is in market with a tender-offer process for its seventh fund that would allow existing investors in the pool to cash out.

That deal, run by Park Hill Group, would also include fresh capital invested into Fund VIII, which Providence is raising now, targeting $5 billion with a $6 billion cap, Buyouts reported.

Action Item: Check out Jordan Co.’s Form ADV here: https://bit.ly/2JXjOmG