TPG launches secondaries business with ex-CPPIB executive, Sunrise Strategic-backed Kodiak Cakes sales process stalls, Deal activity to remain subdued until people can shake hands again

Sunrise Strategic-backed Kodiak Cakes puts its sales process on hold and TPG launches secondaries business with ex-CPPIB exec.

Morning!

I’m a creature of habit … once I start a routine, I tend to stick to it until and unless somehow forcefully pushed out of said routine. One of those is pancakes on Saturday morning, and lately I’ve been making Kodiak brand pancakes. I confess to have fallen for Kodiak’s marketing that leans into a sort of ‘tough’ pancake that frontier folk might have consumed before trekking into the bush to fight bears.

So it was with great interest I read that Kodiak Cakes put its process to explore a sale on hold due mostly to buyer/seller misalignment around price, writes Karishma Vanjani on PE Hub this morning.

Kodiak raised $16.52 million from Sunrise Strategic Partners and other investors in 2016. The company was featured on Shark Tank in 2014. Entrepreneurs Joel Clark and Cameron Smith rejected a $500,000 offer in exchange for 10 percent equity. Shortly after, Kodiak’s sales increased by more than $3 million, Karishma writes. The emergence of the pandemic also contributed to Kodiak’s decision to pull the process, Karishma writes. Read her story here on PE Hub.

Big One: TPG has joined several other large firms in creating an internal secondaries group. TPG hired ex-CPPIB secondaries head Michael Woolhouse to lead secondaries in US and Europe. Woolhouse will join TPG effective Aug. 3 as a partner. Read the news brief here on PE Hub.

Blackstone Group was the pioneer in building secondaries capabilities when in acquired the Strategic Partners team from Credit Suisse in 2013. Other firms include CVC Capital Partners and Brookfield, which both explored building secondaries. Brookfield hired Fabian Neuenschwander and Marcus Day to help build out the firm’s real estate secondaries strategy, Secondaries Investor reported.

Big firms have also used secondaries to help sort out older funds, including TPG, Carlyle Group, Blackstone and Hellman & Friedman, among others. Secondaries has become an integral part of private equity investing as the idea of the 10-year lock-up fund, with its accompanying illiquidity, evolves over time.

Top Scoops
We published our fourth annual Buyouts Emerging Manager Survey conducted in partnership with Gen II Fund Services, LLC that found that 89 percent of institutional investor respondents would still back first-and-second-time funds. However, only 17 percent of respondents intend to increase commitments to first-time funds over the next 12 months, while 28 percent intend to reduce them, the survey found.

“The current environment hasn’t impacted our ability to back emerging managers, but it has slowed it,” says Derek Schmidt, director of private equity at Marquette Associates. “We are certainly proceeding more cautiously with due diligence and virtual on-sites, as we would prefer to meet face-to-face. Nonetheless, we have been able to approve a few strategies.”

Read more here.

Have a great day! Hit me up as always with tips n’ gossip, feedback or just to chat at cwitkowsky@buyoutsinsider.com, on Twitter or find me on LinkedIn.