TPG and Riata Capital close single-asset processes, Inflation concerns creep into private markets

Riata Capital Group closes process to move AEG Vision out of an older fund and into a continuation pool.

Happy Wednesday!

Single-asset processes have become an almost routine part of the industry these days — another option available to GPs looking to sort out older funds holding portfolio companies.
I’ve been asking around whether it’s become almost an expectation among sellers that a financial adviser offer not only traditional M&A or public listing exit tracks, but also the single-asset secondary path. Some sources believe this is the case, but I’ve been getting mixed reviews on this one.

“Ideally, you should be trying all three tracks to maximize value, but can that really happen?” said one secondary buyer.

TPG over the past few months closed its big single-process deal for talent agency Creative Artists Agency, which was expected to value between $1 billion to $1.3 billion. The deal was led by Goldman Sachs, with ICG and Neuberger Berman as part of the investor group. The deal slightly boosted TPG’s ownership stake in the company.

Meanwhile, after the single-asset process closed, CAA last month agreed to acquire ICM Partners. Generally, these deals infuse the subject business with fresh capital for future add-ons, which is part of the rationale for pursuing them. The older funds in which they are held is out of capital, leaving the GP unable to continue growing the company through add-ons.

TPG held CAA in its sixth fund, which closed on $18.87 billion in 2008. The fund was generating an IRR of 9.5 percent and a 1.5x multiple as of March 31, according to performance information from California Public Employees’ Retirement System.
Read more here.

Speaking of secondaries …

Riata Capital Group closed its process to move AEG Vision out of an older fund and into a continuation pool. AEG Vision owns and operates more than 235 eye care practices throughout North America.

Morgan Stanley led the single-asset process, which allowed LPs in an older Riata fund to cash out of their interests in the company, or roll their stakes with the GP, the firm said in an announcement.

The company is relatively new for Riata, which formed AEG in 2017 through the simultaneous acquisition of three regional eyecare groups. Evercore worked as adviser on the secondary deal. Read more here on PE HUB.

That’s it for me! Have a great Wednesday. Reach me with tips n’ gossip, feedback or book recs at cwitkowsky@buyoutsinsider.com or find me on LinkedIn.