Panda Power eyes revamp on funds portfolio valued at nearly $1 bln

  • Panda has explored liquidity options for several years
  • Hired Evercore to work on a restructuring
  • Would include all Panda’s older funds

Panda Power Funds, an energy-focused firm, is exploring a restructuring of its older vehicles that could include almost $1 billion of investments, sources told Buyouts.

The Dallas firm is working with Evercore on a liquidity process. Nothing has been finalized, though the GP wants to work on a restructuring of some kind, rather than a tender offer, sources said.

Tenders simply enable existing LPs to sell out of their stakes at a set price. Restructurings move assets out of older funds into new pools that usually are managed by the same GP. Existing LPs in restructurings can choose to cash out or transfer their interests into the new fund.

Panda has been exploring liquidity options since at least 2017, Buyouts reported.

Edmund Daniels, Panda’s chief compliance officer, did not return a request for comment.

Panda Power Funds was formed out of independent power company Panda Energy, which was formed in 1982 by Robert Carter. Carter is managing partner, chairman and former CEO of Panda Power Funds.

The CEO title is now held by Todd Carter, the firm’s senior partner and founding president.

Other senior executives listed on Panda Power’s website include Panda Energy veterans Ralph Killian, who worked for many years at Panda Energy, including as senior vice president of development of Panda Ethanol; William Nordlund, former general counsel at Panda Energy; and Robert Simmons, CFO at the firm.

Across two flagship funds and one annex pool, Panda has nearly $1 billion of investment, according to a person with knowledge of the firm and Panda’s Form ADV.

Panda Power Generation Infrastructure Fund closed on $420 million in 2011. Panda Power Fund II raised at least $535.5 million in 2014, though it’s unclear how much Fund II ultimately raised.

Panda Power Generation Infrastructure Fund was generating a -14.52 percent return since inception as of April 2017, performance information from Indiana Public Retirement System shows. Fund II was producing an 8.53 percent return as of that date, according to Indiana.

Panda is one of several GP-led liquidity processes on the market in early 2019.

Two secondary buyers said their forward-looking deal pipelines this year total $20 billion or more, unusually high for January. That is a function of the growing acceptance of secondaries as a viable tool to manage older portfolios, as well as work done by intermediaries late last year to get processes in front of potential buyers early.

Activity is weighted more toward traditional LP portfolio sales, but includes GP-led processes, sources said.

Expectations are total secondary volume will hit at least $60 billion and could reach $70 billion, sources have told Buyouts.

Action Item: Check out Panda Power’s Form ADV here: