Despite my best intentions to get to the bottom of every story, I’ve recently run into a handful of private equity funds whose strategies and capital sources remain unfathomable. My calls and research led to some tantalizing tidbits but incomplete narratives.
Pantheon Ventures manages $400 million for two mystery investors
Pantheon Ventures, the London fund-of-funds manager with $32 billion in assets under management, filed Form Ds with the SEC this January for two private equity funds. Each closed on $200 million.
It wasn’t immediately obvious from the names of the funds that Pantheon Ventures was involved. One fund is called KGT Strategic Private Investments LP, the other KFH Strategic Private Investments LP. But the Form Ds list Pantheon Ventures as the sole member of the general partner of the funds. Both have just one investor, suggesting these may be separate accounts whose investors are KGT and KFH.
That’s about it for useful information available from the Form Ds. I emailed a Pantheon Ventures spokesman to get more color. He dashed my hopes of finding a cooperative source. “Pantheon thought it was best to pass on providing commentary with regards to these specific funds,” he wrote. So, who could KGT and KFH be? My Google searches led to informed speculation at best.
A Dubai-based firm called KGT Group of Companies, involved in the sale and distribution of IT and telecom equipment, has a connection to private equity. One of the senior managers, Pritvi Rajkumar, has the title “VC and Group CEO.” He previously worked on private equity and venture capital investments as a VP and minority partner at GPX Enterprises LP. I was unable to reach Rajkumar or anyone else at KGT for comment.
KFH, meantime, may refer to the State of Kuwait-owned bank Kuwait Finance House. Its KFH Asset Management division has sponsored a Shariah-compliant private equity fund. Another affiliate, KFH Capital, runs a private equity business that makes direct investments. But again, I was unable to reach the firm for comment.
So, is Pantheon Ventures expanding its capital-raising in the Middle East with these two funds? Contact me at dtoll@buyoutsinsider if you have any information.
Filing a Form D is the easy part
Have you ever wondered how hard it is to file a Form D? Well, just about anyone can do it after providing some basic contact information to the SEC and getting access codes to file to the EDGAR database. The agency does not vet the filings. In fact, filings appear to the public almost immediately after they’re submitted. That makes sense, given the enormous volume of filings the SEC must get. But it does open the door to some questionable filings.
The firm indicated it would raise money under Rule 506(c) of Regulation D private placement regulations, which would let it advertise the fund and talk to the press during fundraising provided it takes steps to confirm all of its investors are accredited. The minimum commitment required to invest in the funds is just $1,000.
You would be forgiven if you have never heard of Serpent. It is based in the Mississippi city of Petal (population about 10,000). A Google Street View photo from 2007 shows a grassy field and trees at the firm’s corporate address of 220 Cedar Street.
Serpent CEO and Chairman Roy Freeman told me in a January phone interview that since the picture was taken he has built a house there with his wife and business partner. Her title at the firm is vice chairwoman and senior vice president, corporate citizenship.
Freeman, who according to his website bio served as operations and marketing manager of pharmacist staffing agency South Mississippi Pharmacists, as well as president and CEO of Freeman Brands LLC, said that since 2013 he has personally invested less than a couple hundred thousand dollars in several local businesses. They include ones providing car washes, food services and retail pharmacy services. He said he made a “friendly loan” of $15,000 to one company. “I play the stock market a little bit, too,” he said.
Freeman said he picked his fund targets because seven and 21 are the most common numbers to appear in the bible. He also acknowledged a desire to get some publicity from the large size of the targets. He added: “Do I honestly think we’ll raise the $7 [billion] and $21 [billion]? I think we’ll come pretty close.”
In mid-March, I tried to follow up with Freeman, whose bio says he served two army tours in Iraq during Operation Iraqi Freedom. But in a Twitter direct message, he declined to talk again, saying that he was “focused on my work.”
That is understandable. If Freeman really wants to come close to the record $21.7 billion Blackstone Group raised for Blackstone Capital Partners V, then he has his work cut out for him.
Photo courtesy of ShutterStock
(Correction: At its $21 billion target the Serpent private equity fund would come close to, not beat, the record raised for Blackstone Capital Partners V.)