PE HUB Wire Highlights, 9.25.19

Big LP portfolio sales hit the secondary market, OpenGate nears finish on Fund II

Happy Wednesday!

This is Chris, on the Wire for Luisa who is at our San Francisco conference today. We also have our Private Debt Forum in New York, where Howard Marks will give a keynote address this morning.

Big one: We have some major LP portfolios hitting the secondary market as we move into the fall, which is sort of the natural cycle lately. While GP-led deals gestate through the year, big LP portfolios really kick into gear in the second half, sources have told me.

One of those is a portfolio of private equity stakes being shopping by the Teacher Retirement System of Texas that could total up to $3 billion, depending on what sells, sources told Buyouts. Texas Teachers, like other large pension systems, makes big commitments to large managers. I’m not clear on what exactly is in the portfolio but I imagine it’s all about big stuff.

Texas Teachers is actually over its long-term target allocation to private equity, so this could be a motivation for the secondary sale. The system’s portfolio was valued at about $22.8 billion as of June 30, Buyouts previously reported.

Check out the story here. I double-bylined this piece with Rod James of Secondaries Investor fame, who is on a trip to Hong Kong meeting sources and gathering intel.

There was a time when $3 billion would have an almost unimaginable size for a portfolio sale. But not these days. Earlier this year, an around $5 billion portfolio shopped by Japan’s Norinchukin Bank was snapped up by Ardian. Rumors are that other multi-billion dollar portfolios are on the market, so $3 billion seems almost (almost!) routine.