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OEP already closed 12 platform deals out of new $2.75bn fund; OMERS quietly backed MKG

OEP wraps up large fund.

Good morning, Hubsters. MK Flynn here with today’s Wire.

Tooting our own horn, reporter Aaron Weitzman is on a roll this week.

Education infrastructure. This morning, Aaron has an exclusive interview with Godspeed Capital founder Douglas T Lake Jr about the firm’s new platform investment in Huckabee & Associates, an architecture, engineering and construction services firm serving public school districts in Texas.

“States like Texas, California and Florida offer large populations, which necessitate long-term planning around education infrastructure,” Lake said. “Schools are utilized nearly 365 days of the year and thus consistently require renovation or new construction planning and design. With Silicon Valley moving to Austin, Texas, and Wall Street institutions opening offices in Southern Florida, the demographic trends signal increasing demand for education infrastructure in certain growth markets.”

Godspeed is a lower middle-market PE firm that invests in companies in the defense and government sector. The firm has been very active this year. We expect to see more deals from Godspeed.

“Across our government market focus, the architecture, engineering, and consulting sub-sector is particularly interesting to Godspeed, as it offers numerous market niches with meaningful growth potential while offering a strong tailwind from the Biden administration’s trillion-dollar infrastructure program,” he said.

Read the full story here.

Teamwork makes the dream work. And yesterday, Aaron revealed that the Ontario Municipal Employees Retirement System quietly co-invested in Medical Knowledge Group alongside Novo. The purchase of the analytics-driven drug commercialization platform from Court Square Capital and Aisling Capital was announced by Novo back in January, but there was no mention of OMERS. Our Buyouts colleague Kirk Falconer noticed MKG on the online list of OMERS’ portfolio companies, and Aaron reached out to the pension fund, which confirmed the deal. Read more here.

Transformative combination. Earlier this morning, One Equity Partners announced the closing of its eighth fund, with committed capital of $2.75 billion, marking the New York firm’s largest fund since spinning out from JP Morgan in 2015. The new fund brings OEP’s combined AUM and committed capital to approximately $10 billion.

The closing comes at an especially competitive time when PE firms are flooding the market with new funds. “We are grateful for the support from our investors and remain focused on our signature ‘Transformative Combination’ strategy in which we merge complementary, like-sized businesses to create market leaders, and do so with the modest use of leverage,” said Dick Cashin, president and founder. “This approach has historically helped our portfolio withstand a variety of economic conditions and allowed us to be nimble and opportunistic during periods of short-term volatility.”

OEP will continue to target equity investments between $30 million and $300 million in technology, industrial and healthcare businesses across North America and Europe. The firm has already closed 12 platform investments out of OEP VIII: AMECO, BRUSH, Cicor, Wood Technologies International, Momentum Manufacturing Group, Armis, Rosboro, InfuCare Rx, Eco Material Technologies, Montgomery Transport, Norit Activated Carbon, Trustmarque and PGW Auto Glass.

When the InfuCare Rx deal was announced back in January, I interviewed OEP senior managing director Greg Belinfanti about the portfolio company, which provides infusion therapies and therapy management services to patients with complex chronic conditions. For more, read the interview about investing in home healthcare.

Off duty. Buyouts’ Off-duty column provides a snapshot of top investors, including a few details about what they do when not chasing deals. Check out Kirk’s latest column on Michael Rees, co-president of Blue Owl Capital. Rees “may rightly be called the father of modern GP staking,” Kirk writes. “As the one-time COO of Neuberger Berman’s alternatives business, he came up with the idea of a fund that would acquire passive minority interests in private equity firms. Founded in 2011, Dyal Capital is today the market’s largest GP stakes investor. Last spring, Dyal merged with Owl Rock Capital Partners, forming Blue Owl, a $94 billion multi-strategy alternative asset manager.”

Professionally, what was his toughest moment?

“Spinning Dyal out of Neuberger Berman was both the toughest and most rewarding,” Rees said. “It was difficult to say goodbye to a firm where I spent 20 years, and where I was involved in some of the seminal events in the organization’s history. But the spinout was also the beginning of a new chapter, building and growing Blue Owl. It has been exciting, but it was tough to say goodbye to my NB colleagues.”

Read the interview to find out more, including how Dyal got its name.

Don’t be a stranger. As always, I’d love to hear from you. Share tips and insights on dealmaking with me at mk.flynn@peimedia.com.

Until tomorrow,

MK