Small secondaries shop PEI Funds hit by series of departures

PEI Funds, a small secondary shop formed in 1992, in recent months has been roiled by a series of departures.

One of its longtime managing directors, Gunnar Fremuth, left in December, according to his LinkedIn profile. It’s unclear whether his departure was part of a planned succession.

Other departures include Chief Compliance Officer and Controller Ed Muradian, who left in February, according to his LinkedIn profile; Kellen DiStefano, a vice president who was listed on PEI Funds’ website until around March; and Richard Vietor, a venture partner.

It’s not clear why each person left. Chuck Stetson, co-founder and managing director, did not respond to a request for comment.

Stetson runs the shop, along with David Parshall, co-founder and managing director, and Managing Director Benjamin Wilson. Stetson owns 100 percent of the firm’s common stock, according to PEI Funds’ Form ADV as of March 2016.

Charles Campbell is listed as chief compliance officer on the Form ADV as of March, though he is not listed on the firm’s website.

PEI Funds raised its most recent pool, Private Equity Investment Fund V LP, in 2010, closing on $202.7 million on a $250 million target.

Fund V was generating a negative 4.6 percent internal rate of return and a 0.9x total value to paid-in multiple as of June 30, 2016, performance information from Town of Palm Beach Retirement System showed.

Fund V charges a 1.75 percent management fee and a 12.5 percent carried-interest level with an 8 percent preferred return, the Palm Beach pension report said.

PEI Funds was founded in 1992 to acquire small, mature secondary stakes in venture, growth equity, buyout and mezzanine funds and private companies, according to a statement. The firm had $221 million under management as of Dec. 31, 2015, the Form ADV said.

Action Item: PEI Funds’ Form ADV:  https://adviserinfo.sec.gov/IAPD/Part2Brochures.aspx?ORG_PK=160559

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