As we explore the possibilities of a portfolio of fund stakes being sold out of the SVB bankruptcy, we’re also wondering if anything will come out of First Republic. The flailing bank, once the haven of wealthy individuals, is seeking more capital from other banks to help prop it up, CNBC is reporting this morning.
The pitch will go something like this, according to bankers with knowledge of the situation: Purchase bonds from First Republic at above-market rates for a total loss of a few billion dollars – or face roughly $30 billion in FDIC fees when First Republic fails, according to the report.
We’re still waiting to find out the fate of SVB Capital, especially its $10 billion fund-of-funds operation that has stakes in some of the biggest venture funds out there. We understand management has been on the road trying to attract suitors, but, as we explored here on Buyouts, there are challenges to a potential external buyer.
New Mountain, which is back in market with its next flagship pool, made a majority investment in specialty staffing company ALKU. Existing investors FFL Partners, WestView Capital, ALKU founder and CEO Mark Eldridge and company management are reinvesting alongside New Mountain, according to a statement.
ALKU was formed in 2008. WestView took a minority stake in the company in 2016 and FFL Partners invested in a majority stake in 2019. Company management invested alongside FFL at the time to retain a significant minority ownership in the business.
New Mountain, meanwhile, is back in the challenged markets targeting $12 billion for its seventh fund. Read it here on Buyouts.
Look! An exit!
Vista Equity is selling a majority stake in its portfolio company Fusion Risk Management through an investment from Great Hill Partners. The firm invested in Fusion through its small-cap focused Endeavor fund in 2019.
Vista will remain a minority owner alongside Catalyst Investors and Level Equity Management. Catalyst led a $41 million funding round in 2017 with participation from Level Equity, PE Hub reported at the time.
Fusion Risk provides software and services for cloud-based risk management and business continuity.
PE Hub reporter Obey Martin Manayiti explored some of the deal activity around enterprise software in a recent feature. Read it here.
Hunter Point Capital, led by ex-GSO chief Bennett Goodman and ex-JC Flowers exec Avi Kalichstein, has collected about $2.6 billion for its debut GP stakes fund, which is one of the largest first-time funds ever raised.
It’s not clear if Hunter Point is still fundraising or if it’s held a final close on $2.66 billion. A spokesperson declined to comment.
The largest LP portfolio sale in the market this year was a $6 billion offering from Kaiser Permanente, which some sources said would not get anywhere near that total amount.
But even with a slight discount to net asset value, the system appears to have sold most of the portfolio. With a small sale still happening, Kaiser is expected to move more than $5 billion of the $6 billion total, sources told Buyouts. Kaiser is working with PJT Park Hill on the process.
While uncertainty and hesitation remain in secondaries, buyers are equipped with dry powder and are looking for more diversification. Kaiser’s portfolio was said to be full of stakes in well-performing funds, and a group of buyers participated in the sale.
That’s it for me! Have a great rest of the day. Hit me up with tips n’ gossip, feedback or book recs (I’m re-reading Bleak House after a lawyer ticked me off the other day) at email@example.com or find me on LinkedIn.