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Thoma Bravo-backed Apttus to merge with Conga, Ellie Rubenstein’s Manna Tree aims to do a deal a quarter, Ares raises $3bn for investments into dislocation

Ares Management closed on $3 billion for its special opportunities fund and Manna Tree wants to do a deal every quarter.

Happy Friday!

Hope you had a nice week. At my house, the kids and I will be preparing a big Mother’s Day breakfast Sunday, so big weekend coming up …

Amendment: One theme I’ve been following is GPs asking limited partners for amendments to fund terms. Requests come for a variety of functions, including managers looking for the ability to recycle exit proceeds into existing portfolio companies.

I spoke with one of my favorite LPs recently (a person with a detailed view of the private markets) who mentioned they are seeing lots of requests from GPs looking for greater flexibility to put debt on their funds.

We talked about this a few columns ago about the rise of NAV-based lending, which is secured by the entire fund portfolio. That’s a main type of fund-level debt some GPs are using to get more capital into existing portfolio companies that need a bridge through the pandemic lockdown.

Many GPs have the ability to use debt at the fund level, but recent requests come from managers of older funds to extend their time frame for using fund-level debt, the LP said. This is especially for funds that are six to 10 years old.

“Unusual times call for unusual measures … this is hopefully a once-in-a-lifetime tough thing happening,” the LP said.

As always, this request comes down to LP appetite, and some LPs may have problems allowing a GP to put more debt on a fund with challenged investments, especially those fund investors burned in the past. “Some investors … don’t like the idea of leverage on leverage, even at modest levels of 10 or 20 percent,” the LP said. “If things go belly up, what does the bank do? Do they sell at fire sale prices to protect their debt, but don’t protect our (LPs’) long-term [interests]?”

I’ve heard of amendment requests around recycling, time extensions, expanding limits on deal concentration and geography … anything else? Reach me at

Distress: Another interesting point I’ve heard over a few conversations: special situations and distressed strategies that may have been of less focus to LPs than buyout and growth earlier this year have jumped to be of primary focus.

“People who have struggled, maybe they were in two, three rows back in investors’ minds with distressed emphasis, life is better for them,” the LP said. “Even if in normal times they were second tier, they’ve moved up to first tier, people want to rotate in and get some of that special situations stuff going on.”

A Probitas Partners survey published in late April showed that the sector has attracted the most interest among respondents compared to last year, with the strongest focus on special situations. Around 74 percent of respondents focused on distressed debt/special situations are looking at making investments in stressed and distressed situations, the survey said.

Top Scoops
Ellie Rubenstein, CEO and co-founder of Manna Tree Partners, wants to do a deal every quarter, even in the downturn, writes Karishma Vanjani on PE Hub. While a deal per quarter is the aim, the firm has no plans on closing an investment ‘virtually’.

“We will only close after meeting them [the management team] face-to-face and seeing the plant run at full capacity,” Manna Tree CIO Ross Iverson told Karishma. Read more here on PE Hub.

Ares Management closed on $3 billion for its special opportunities fund, heading for its $3.5 billion hard cap in an environment the firm says is ideal for the platform, Justin Mitchell writes on Buyouts. The fund grew from its initial $2 billion target due to rising opportunities in the downturn, Mitchell said. Read more here on Buyouts.

That’s it! Have a great weekend. Hit me up as always with tips n’ gossip, feedback or just to chat at, on Twitter or find me on LinkedIn.

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Emerging managers and covid-19 – survey
If you’re an investor or a next generation fund manager, please take 15 minutes to fill out our fourth-annual emerging manager survey – you’ll get a complimentary copy for participating. If you’re an LP, click here to get to the survey. If you’re an emerging manager, click here.

Investors, has your faith in fledgling managers changed with the onset of a market downturn? Managers, have peer-group firms adjusted terms to keep LPs interested? Understanding the sentiment of your peer-group is essential for decision-making moving forward, so we’re asking:

LPs, how actively are you backing spin-out groups and other emerging managers? How do you make commitment decisions? What terms do you negotiate?

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