Private Equity - Bloomberg Briefs

BRIEF
Private Equity
News, analysis and Commentary
Chicago Growth Halts Fundraising
Quote of the Week
By Sabrina Willmer and Kiel Porter
Chicago Growth Partners LLC, the firm founded by employees of investment bank
William Blair & Co., halted fundraising for its latest buyout fund more than halfway toward
its target.
The firm had gathered about $300 million of the $500 million it was seeking for Chicago
Growth Partners III LP before canceling marketing, and it will return the commitments,
said two people familiar with the matter. The firm will finance future investments by gath
ering capital from investors on a deal-by-deal basis, said one of the people.
Chicago Growth began raising its third fund in 2012, and received as much as $75 mil
lion from Minnesota State Board of Investment, according to data compiled by Bloom
berg. The firm pulled the fundraising in part because of disagreements over how the
carried interest, or the slice of profit it receives from successful investments, should be
dispersed among the investing team, said one of the people.
Managing partner and co-founder David Chandler denied that profit-sharing was an issue.
“As fundraising has progressed, the continued evolution in the dealmaking, regulatory
and LP relationship landscape have caused us to reflect upon our goals as an organiza
tion and as individuals,” Chandler wrote in an e-mailed statement. “After much consider
ation, we have decided to discontinue our fundraising efforts for CGP III and embark on a
different path.”
Chicago Growth backs companies within the education, health-care, tech-enabled ser
vices and industrial technology sectors, according to its website. The firm typically invests
$15 million to $75 million in companies with revenue of $15 million to $150 million, the
website shows.
The firm raised $270 million for its first fund after spinning out from William Blair. Its
most recent pool gathered $500 million in 2008.
The firm recently agreed to sell its stake in SchoolMessenger, a provider of notifica
tion and mobile communication services to the K-12 education market, to West Corp. In
October, it completed a dividend recapitalization of FineLine Technologies, a provider of
web-based bar code ticketing and labeling for retailers and brands. The firm manages
$1.2 billion.
Some of the firm’s past backers include Credit Suisse, British Airways Pension, Swiss
Re, Skandia Life Insurance, Davidson College and Spellman College.
YTD Fund-Raising by Type, Region ($Mlns)
Buyout
Debt
Fund of Funds
Growth
Real Assets
Real Estate
Secondary
Venture
Grand Total
Any Asia-DEV Asia-EM
13,456
4,104
4,622
11,161
93
4,896
225
215
4,732
200
3,330
1,349
1,159
13,073
4,512
293
2,354
56,508
4,623
8,642
E Eur
67
LatAM
85
1,066
63
1
100
200
1,333
250
ME/AFR N Amer W Eur
761
26,164
5,632
7,516
3,311
1,592
259
823
896
250
10,372
1,176
9,003
4,554
25
156
120
4,421
342
1,131 59,916 16,327
05.21.14
www.bloombergbriefs.com
Total
54,891
22,081
7,251
7,720
15,228
16,063
13,254
12,242
148,730
Source: Bloomberg. Data is collected from announced and reported closes. Non-dollar funds have been converted.
1 2 3 4 5 6 7 8 9 10 11 “I still think that the value of carry
is undervalued in the market.”
— Adena Friedman,
Carlyle Group’s departing CFO,
speaking on the valuation of
publicly traded private equity
fund managers (see page 5)
Meeting to Watch
Alaska Permanent Fund Corp.
The system will discuss its 2015 private
investments allocation, as well as Arch
Ventures, at a meeting today.
inside
FOURTH TIME AROUND
CCMP agrees to buy Hillman Cos. from
Oak Hill Capital — the fourth buyout of the
hardware company in 13 years. Page 2.
SECONDARIES
UniCredit is exploring the sale of $1.4 bil
lion in private equity stakes held by Hypo
Vereinsbank, its German unit. Page 5.
FROM THE MINUTES
Town of Greenwich signed a fee reduc
tion with Pine Bridge. Hawaii Employees
Retirement wants to talk to Macquarie
Funds Management about organizational
changes there. Page 4.
CLOSINGS
Centre Partners held an initial close for its
next fund. CIP Capital held a final close on
its $230 million debut fund. Page 5.
Off THE BALANCE SHEET
Henry and Marie-Josée Kravis are donat
ing $100 million to found a new cancer
center at Memorial Sloan Kettering. Page 7.
COMINGS AND GOINGS
Roberto Biondi is taking over as the head
of Permira’s finance team following Max
Biagosch’s departure. Page 7.
Q&A
New sources of oil and gas and new inde
pendent midstream companies create op
portunities for private equity, says EnCap
Flatrock Midstream’s William Lemmons.
Page 11.
05.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity
2
around the world in SEVEN DAYS
Fourth Consecutive Buyout for Hillman; Monster Valuations for Pinterest, Uber
Big Valuations for
Pinterest, Uber
Google Said to Approach
VC-Backed Twitch
Pinterest Inc. raised $200 million in a fund
ing round that gives the Web-scrapbooking
startup a $5 billion valuation, up from $3.8
billion seven months ago. Uber Technolo
gies Inc., the maker of a car-service booking
app, is in talks to raise new financing in a
round that may value it at more than $10
billion, according to people with knowledge
of the situation. That would almost triple
its value from $3.5 billion last year when it
garnered $258 million. Both companies are
based in San Francisco.
Google has held talks to purchase video service
Twitch Interactive to boost its YouTube site, accord
ing to a person with knowledge of the matter. The
San Francisco-based company, which acts as a
social gathering place for video gamers, received
$35 million in funding in two rounds in 2012
and 2013 from Draper Associates, Alsop Louie
Partners, Deer Management, Take-Two Interactive
Software, West Summit Capital and Thrive Capital.
Variety reported earlier this week that the two
companies are in talks on a transaction that could
value Twitch at about $1 billion. Spokesmen for
Google and Twitch declined to comment.
CVC Prepares
Cerved to Go Public
CVC Capital Partners portfolio com
pany Cerved Information Solutions
plans to start investor presentations
today for a planned IPO in Milan,
according to two people with direct
knowledge of the transaction. The
company, which provides credit
information services in Italy, may
raise as much as 500 million euros
($685 million) in the IPO, said the
people. The Milan-based company
may be valued at as much as 1 bil
lion euros, one of them said. Rep
resentatives for CVC and Cerved
declined to comment.
Golden Gate Buys Red
Lobster for $2.1 Billion
CCMP Leads 4th Consecutive
Buyout of Hillman Cos.
Golden Gate Capital agreed May 16 to buy the strug
gling Red Lobster seafood-restaurant chain from
Darden Restaurants for $2.1 billion, leaving Darden
to focus on the turnaround of its Olive Garden chain.
Golden Gate has agreed to sell about 500 Red Lob
ster locations to American Realty Capital Properties
for about $1.5 billion and then lease back the spaces.
Activist investor Barington Capital, which had pressed
Darden to consider keeping Red Lobster and sepa
rate its real estate holdings, objected to the sale.
CCMP Capital agreed May 19 to buy a controlling
stake in The Hillman Cos. from Oak Hill Capital
Partners in a deal that values the maker of fasten
ers, keys and hardware at $1.475 billion. Oak Hill
will retain a significant minority interest, the firms
said in a statement. It will be the fourth consecu
tive buyout of the Cincinnati-based company. Oak
Hill bought it from Ontario Teachers’ Pension Plan
Board and other investors in 2010 for $815 million.
They had purchased it from Allied Capital in 2004
for $510 million.
Private equity
Venture capital
Exits
EXPLORE THE WORLD
OF PRIVATE EQUITY
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Bloomberg Brief | Private Equity
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Bloomberg Brief | Private Equity
4
FROM THE MINUTES
John Chadwick, chairman of Town
of Greenwich Connecticut Retirement
Board, signed an amendment for a man
agement fee reduction with Pine Bridge,
according to minutes from a March 20
meeting. The board voted to add an addi
tional side letter to its agreement with EIG
Energy Fund XVI.
http://bit.ly/1n1byhq
■■
After hearing presentations from Landmark Partners and Lexington Partners,
Firefighters Retirement System of
Louisiana selected Landmark Partners as
its private equity secondaries market man
ager finalist, according to minutes from the
April 9-10 meeting. The pension selected
Lexington Partners on a contingency basis
“to be retained only if a contract cannot be
perfected” with Landmark.
http://bit.ly/1k3srsd
State of Hawaii Employees Retirement System will meet with representa
tives of Macquarie Funds Management
to investigate the effects of organizational
changes at the firm, according to March
17 minutes. Chair Pilialoha Lee Loy ap
pointed herself and trustees Emmit Kane
and Jackie Ferguson-Miyamato to meet
with Macquarie.
http://bit.ly/1i1tjsB
■■
■■
Minnesota State Board of Investment
was to consider a commitment with one
existing private equity manager, according
to the agenda from yesterday’s meeting.
Also on the agenda was an item that read:
“unallocated portion of alternative invest
ments.”
http://bit.ly/1ocwano
■■
■■
Montana Board of Investment put
up eight funds for secondary bids and
received 40 offers, according to April
meeting minutes. Proceeds of $126 million
were expected by the end of June from
the sales, which included funds from
Madison Dearborn and First Reserve, with
whom the system doesn’t plan to re-up.
The system also added distressed debt,
special situations and co-investments
as subcategories to the Montana Private
Equity Pool investment policy statement.
Documents also show that the “buyout
policy range will be revised from 40
percent to 75 percent to 50 percent to 80
percent,” giving the pension more flexibil
ity in the buyout strategy, which is nearing
its current ceiling. The system plans to
commit $150 million to $200 million to pri
vate equity and $60 million to $100 million
to real estate in 2014.
http://bit.ly/RSsc7O
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Bloomberg Brief | Private Equity
5
BRIEF EXCLUSIVES
UniCredit Plans $1.4 Bln Stapled Secondary Sale
UniCredit SpA is exploring selling private equity fund stakes held by its German unit
HypoVereinsbank to bolster its balance sheet.
UniCredit, based in Milan, is considering a 1 billion euro ($1.4 billion) deal that would
involve a buyer of the stakes also committing capital for future investments, known as a
stapled secondary deal, according to two people with knowledge of the situation.
HypoVereinsbank, the Munich-based unit, completed a similiar deal last year where
the bank’s private-equity arm spun out to form SwanCap Partners GmbH. Secondary
buyer AlpInvest Partners BV, owned by the Carlyle Group LP, helped structure a deal
that involved purchasing fund stakes from HVB and providing capital to the team, which
is led by Florian Kreitmeier. The team historically relied on UniCredit for capital.
Nicole Selle, a spokeswoman for UniCredit, declined to comment.
Financial institutions have been selling private-equity stakes in order to strengthen
balance sheets and meet regulatory requirements. JPMorgan Chase & Co., Citigroup
Inc., Lloyds Banking Group Plc, Barclays Plc and Credit Agricole SA are among banks
that have tapped the secondary market in recent years.
HVB used the secondary market in 2011 when it marketed a portfolio of about 300
million euros, according to a person familiar in January 2013. HVB was acquired by
UniCredit in 2005 and now operates as UniCredit Bank AG.
— Sabrina Willmer and Kiel Porter
Centre Partners Holds Initial Close
Centre Partners Management LLC has held an initial close on more than $134 mil
lion for its next private-equity fund, according to two people familiar with the situation.
Centre Capital Investors VI LP is seeking $500 million to make investments in North
American middle-market companies, these people said. The firm is seeking a smaller
pool than the $625 million it gathered for its last fund in 2007.
Mark Semer, a spokesman at Kekst & Co., declined to comment on behalf of Centre
Partners.
Centre Partners, with offices in New York and Los Angeles, typically invests $20 mil
lion to $50 million in businesses with $50 million to $500 million in revenue, according
to the firm’s website. Founded in 1986, the firm has invested more than $2 billion in
more than 70 deals, according to its website.
The firm’s managing partners are Bruce Pollack and David Jaffe. Jaffe came from
DLJ Merchant Banking Partners, where he was a founding member. Pollack has been
with Centre Partners since 1991.
In 2012, Bregal Investments Inc., an early anchor investor for Centre Partners,
hired senior partners Robert Bergmann and Scott Perekslis away to start its own
private-equity fund. In 2003, Bregal invested about $600 million with Centre Partners.
The VAlue of Carry
“I still think that the value of carry
is undervalued in the market,” Adena Friedman, Carlyle Group LP’s
departing chief financial officer, said
yesterday at the inaugural Bloom
berg CFO Conference in New York,
referring to carried interest.
Blackstone Group LP CFO
Laurence Tosi echoed Friedman’s
comments when he spoke at the
conference, which was sponsored
by Bloomberg Link. Tosi said the
valuation discount of the largest
alternative-asset managers to tradi
tional stock and bond fund compa
nies “is just not sustainable” and will
improve over time.
Friedman, who was CFO at at
Nasdaq OMX Group Inc. from 2009
to 2011, will return to the stockexchange operator on June 12 as
president of global corporate, infor
mation and technology solutions.
Carlyle benefited by not being the
first private-equity firm to go public,
Friedman said, because it took
advantage of greater investor under
standing of the leveraged-buyout
business and it was able to time the
offering with a market upswing.
Fortress Investment Group LLC
and Blackstone completed their
IPOs in 2007 and are trading below
their IPO prices.
— Devin Banerjee
— Sabrina Willmer
continued on next page
Bloomberg Brief Private Equity
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Bloomberg Brief | Private Equity
6
BRIEF EXCLUSIVES...
continued from previous page
Ex-DLJ Execs Close on $230 Mln for New CIP Fund
CIP Capital, started by executives of DLJ Merchant Banking Partners, held a final
close on its debut private-equity fund at about $230 million, according to two people with
knowledge of the matter.
The New York-based firm closed CIP Capital Fund LP above a revised $225 million
target, said one of the people familiar. CIP started marketing its fund in the second half of
2011 with a $350 million target, this person said.
Justin Lipton, a managing director at the firm, declined to comment.
CIP Capital typically invests $25 million to $75 million in companies with $25 million to
$100 million in revenue, according to the firm’s website. The new fund has invested in
four companies, including OnCourse Learning Co, CoAdvantage Corp., RevSpring Inc.
and I Drive Safely LLC.
CIP Capital focuses in the business-to-business information management, business
process outsourcing, marketing services and knowledge services sectors.
The firm is led by co-founder Scott Marden, who headed investments in information,
media and services companies for DLJ Merchant Banking Partners. Co-founders Lipton
Melissa Vlak and Bobby Kelly also came from DLJMBP.
— Sabrina Willmer
Bain Venture Arm Seeks $625 Mln for Technology Fund
Bain Capital LLC’s venture arm is seeking $625 million for its latest fund as the indus
try enjoys the best market for initial public offerings since the late 1990s dot-com bubble.
Bain Capital Venture Partners 2014 LP will mostly invest in infrastructure software,
health-care technology and other technology companies that serve businesses in North
America, according to marketing documents viewed by Bloomberg News. It can also
back consumer-focused firms, including those in e-commerce.
Charlyn Lusk, a spokeswoman for Bain at Stanton Public Relations & Marketing, de
clined to comment on the firm’s fundraising plans.
Bain Capital started a dedicated venture arm in 2000 and the unit raised its first fund
the following year. The team’s West Coast office in Palo Alto, California, is led by Ajay
Agarwal, who focuses on early-stage software, mobile and Internet investing.
For the latest fund, the firm will charge a 2.5 percent management fee and take a 25
percent carried interest, according to the documents. Bain Capital Venture Partners will
commit at least 10 percent of the fund’s total capital. The firm is also raising a pool of
capital to invest alongside the main fund and in larger deals.
The firm is seeking a pool similar in size to the venture arm’s last fund, which gathered
$601 million in 2012.
The firm’s 2009 fund was producing a multiple of 1.3 times invested capital and a 12
percent net internal rate of return as of Dec. 31, according to the documents. Its biggest
realized profit has come from Liazon Corp., a private benefits exchange company that
earned the pool more than five times its money. Rent the Runway, the online dress and
accessories provider, is poised to be the biggest win for the fund, valued at more than six
times the original investment as of Dec. 31.
A 2007 fund was producing a 1.9 multiple and a 15 percent return rate at the end of the
year, the document shows.
BRIEFLY NOTED
■■ KKR & Co., TPG Capital and
Goldman Sachs Capital Partners
asked the judge overseeing the bank
ruptcy of Energy Future Holdings
Corp. to limit a proposed probe of
their decisions concerning the Texas
power company.
The information request, made by
a trustee on behalf of creditors who
may lose money in the reorganiza
tion, is too broad because it seeks
seven years worth of documents, the
investors said.
While bankruptcy court rules
sometimes seem to permit “‘fishing
expeditions,’ what is proposed here
is to scour the Pacific Ocean, in a
matter of days, in search of any and
all fish regardless of the size, shape
or species,” the investors said in court
papers filed May 19.
The three private equity firms took
the company, then known as TXU
Corp., private in 2007 in a record
$48 billion leveraged buyout. Their
ownership will be cut to less than 1
percent under a proposed refinancing.
— Steven Church and Linda Sandler
■■ CVC Capital Partners raised
$3.5 billion for its fourth Asia Pacific
fund, it said in a statement May 19,
11 months after fundraising began.
The fund will target businesses that
will benefit from growing consumer
affluence and domestic demand
in Greater China, Southeast Asia,
Japan and Korea.
CVC said it has raised over $10
billion to invest in the region and
has completed more than 46 invest
ments there.
— John E. Morris
— Sabrina Willmer
LEARN HOW TO USE
BLOOMBERG FUNCTIONS
1 2 3 4 5 6 7 8 9 10 11 <HELP>
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Bloomberg Brief | Private Equity
7
Off The Balance Sheet
Kravises Fund Oncology Center; Castle Says Student’s Job Is Never Done
of Memorial Sloan Kettering’s board since
2000 and is chair of the Sloan Kettering
Institute. The new center will be named for
the Kravises.
— John E. Morris
Marie-Josée and Henry Kravis
Photo: Peter Foley/Bloomberg
■■ KKR & Co. founder, co-chairman and
co-chief executive Henry Kravis and his
wife Marie-Josée have donated $100
million to found a new Center for Molecu
lar Oncology at Memorial Sloan Kettering
hospital in New York. The center will pursue
personalized forms of cancer treatment us
ing genomic analysis of patients’ tumors.
“Progress in our understanding of the
biology of cancer has completely shifted
the way we think about and treat cancer,”
Memorial Sloan Kettering chief executive
officer Craig B. Thompson said in a state
ment. “We’re moving away from the concept
of treating cancer as many different types of
the same disease and toward treating each
person’s cancer as its own unique disease.”
Marie-Josée Kravis has been a member
■■ Geoffrey Lieberthal, a principal at Lee
Equity Partners, Chris Kojima, a partner
at Goldman Sachs Group Inc., and Carter
Simonds, a managing director at Blue
Ridge Capital, dined under the whale at
the American Museum of Natural History
on “Museum Dance” night May 15. Dinner
took place in the Hall of Ocean Life, with
cocktails and dancing in the Hall of the
Universe, a hot spot at the museum since
Neil deGrasse Tyson, the director of the
Geoffrey Lieberthal, a principal at Lee Equity
Partners, and Aliza Waksal, a founder of the
Seedlings Group. Photo: Amanda Gordon/Bloomberg
planetarium, began hosting “Cosmos” on
Fox, a remake of Carl Sagan’s television
series. “I love the museum, my kids are here
all the time,” said Kipp deVeer, president
of Ares Capital Corp. The event raised
money to benefit the museum’s scientific
and educational programming.
— Amanda Gordon
John K. Castle, Chairman and Chief
Executive Officer of Castle Harlan, Inc.,
the New York private
equity firm, received
an honorary doctor
ate from Franklin
Pierce University
May 17.
In his acceptance
speech Castle
stressed to the 2014
graduates “the art of
continuous learning. John Castle Photo:
Peter Foley/Bloomberg
Education is not a
static thing, over and done with once you
have a diploma in hand.”
Castle earned a bachelor’s degree from
the Massachusetts Institute of Technol
ogy and an M.B.A. from Harvard Busi
ness School.
■■
– John E. Morris
Comings, Goings & Sayings
Permira Replaces Finance Team Head; 3i Names Three New Partners
■■ Permira Advisers LLP, one of
Europe’s largest private-equity firms,
replaced the head of its finance team
with partner Roberto Biondi following
Max Biagosch’s departure.
The finance group secures debt for the
firm’s investments. Biondi took over last
month, a Permira spokeswoman said.
Before joining London-based Permira
in 2001, Biondi was an associate at
McKinsey & Co. for three years, working
for the telecommunications practice in
Italy and Israel, according to Permira’s
website. A partner since 2010, he has
assisted in deals including gaming
group Sisal and U.K. annuity provider
Just Retirement Plc.
Biagosch, who joined Permira in 2007
as a member of the consumer team,
became head of finance in 2011. Before
joining Permira, Biagosch worked at
BNP Paribas SA and Deutsche Bank
1 2 3 4 5 6 7 8 9 10 11 AG, according to Permira’s website. He
could not be reached by e-mail or direc
tory assistance.
— Kiel Porter
■■ London-based middle-market
private-equity firm 3i Group Plc named
three new partners May 19: Xavier de
Prevoisin in France; Richard Relyea
for North America; and Pete Wilson in
the U.K.
— John E. Morris
05.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity
8
Marketing
Recent Launches/Pre-Marketing
Fund name
Bain Capital Venture Partners 2014 LP
JMI Equity Fund VIII LP
African Capital Alliance Fund IV LP
SK Capital Partners IV LP
Monk's Hill Ventures Fund
Resolute II LP
Park Square Capital Partners III LP
Turner-Agassi Charter School Facilities
Fund
Venture
Venture
Growth
Buyout
Venture
Venture
Debt
Strategy
Region
North America
North America
Middle East and Africa
North America
Asia Pacific Emerging
North America
Western Europe
Real Estate
North America
Currency
USD
USD
USD
USD
SGD
USD
EUR
Target (orig Cur)
625
900
600
750
100
40
1000
USD
250
Recent Closes
Fund Name
Clayton Dubilier & Rice IX LP
CVC Capital Partners Asia Pacific IV LP
Parallax Capital Fund LP
Riverside Asia-Pacific Fund II LP
Tower Arch Partners I LP
Sierra Ventures X LP
Atalaya Asset Income Fund II LP
Longwood Fund II LP
JMH Capital Partners II LP
Strategy
Buyout
Buyout
Buyout
Buyout
Buyout
Venture
Debt
Venture
Venture
North America
Asia Pacific Emerging
Any
Asia Pacific Emerging
North America
Any
North America
North America
North America
USD
USD
USD
USD
USD
USD
USD
USD
USD
Target
(orig Cur)
5,000
3,000
125
150
NA
200
300
80
200
fund
Region
strategy
Region
Currency
Closed in
2014 (USD)
1,530
1,500
60
120
123
33
99
67
10
Closed To
Date (USD)
6,430
3,500
115
235
123
145
99
67
10
Committed
(M)
Target (M)
Recent LP Commitments
name of lp
Cook County Employees' and Officers' Annuity
and Benefit Fund
Illinois State Universities Retirement System
Illinois State Universities Retirement System
Montana Board of Investments
Montana Board of Investments
New Jersey State Investment Council
New Jersey State Investment Council
New Jersey State Investment Council
New Jersey State Investment Council
New Mexico State Investment Council
New Mexico State Investment Council
Oklahoma State Regents for Higher Education
Oregon Investment Council
Oregon Investment Council
Oregon Investment Council
Texas County & District Retirement System
CBRE Strategic Partners U.S. Value 7
North America
Real Estate
Adams Street 2014 Global Fund
Macquarie Infrastructure Partners III
Trilantic Energy Partners (North
America)
GI Partners Fund IV
Vista Equity Partners Fund V
Onex Partners IV
HiTecVision VII
Och-Ziff Real Estate Fund III
EnCap Flatrock Midstream Fund III
FS Equity Partners VII
EnCap Flatrock Midstream Fund III
Alterna Capital Assets Fund II
DivcoWest Fund IV REIT
Waterton Residential Fund XII
MCP Private Capital Fund II
Any
Any
Fund of Funds
Real Assets
North America
Buyout
Any
North America
North America
Any
North America
North America
North America
North America
North America
North America
North America
NA
Buyout
Buyout
Buyout
Buyout
Real Estate
Real Assets
Buyout
Real Assets
Real Assets
Real Estate
Real Estate
NA
$30
NA
$100
$50
$1,050
$2,500
$20
$500
$20
$200
$200
$100
$100
$25
$75
$5
$100
$100
$100
EUR30
$1,500
$3,500
$4,500
$1,500
$1,000
$2,250
$1,000
$2,250
$600
$888
$1,000
NA
Source: Compiled by Bloomberg
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Bloomberg Brief | Private Equity
9
Calendar
Upcoming Limited Partner Meetings
Public pension meeting dates can now be accessed on EVTS <GO> on the Bloomberg terminal. For more information, e-mail [email protected]
MEETING
DATE
NAME
NOTES
Los Angeles County Employees' Retirement Association
Investment Board
5/21/2014
Adopt revised real estate objectives
Alaska Permanent Fund Corp.
5/21/2014
Investment policy amendment - real estate leverage; FY2015 private investments allocation; special opportunities - Apollo PCIO; ARCH Ventures
Louisiana State Police Retirement System Board
Wyoming Retirement System
Iowa Municipal Fire & Police Retirement System
University of California Regents - Committee on Investments
Louisiana State Employees' Retirement System
Maryland State Retirement and Pension System Board
New Mexico Educational Retirement Board - Invest Committee
North Carolina Investment Advisory Committee
5/21/2014
5/21/2014
5/22/2014
5/22/2014
5/22/2014
5/22/2014
5/22/2014
5/22/2014
Houston Municipal Employees Pension Fund
5/22/2014
Kentucky Teachers' Retirement System - Invest Committee
5/22/2014
Dallas Police & Fire Pension System
Arizona State Retirement System
New Hampshire Retirement System - Investment Committtee
5/22/2014
5/23/2014
5/23/2014
Global tactical asset commitment recommendation; non-core real estate
1Q investment performance summary
EIG portfolio review; Private Advisors commitment discussion/recommendation
Five Point Capital Midstream Fund II
JMI Equity Fund VIII; amendments to European Real Estate Debt Fund II & AG Net
Lease Realty Fund III
Report on alternative investments: NGP Natural Resources XI; asset allocation targets
and ranges discussion; real estate manager discussion
Real estate strategic allocation plan
Source: Compiled by Bloomberg
Sponsored by:
JUN 9-10, 2014
CAVALLO POINT
SAUSALITO, CA
SPEAKERS
ESTHER DYSON / HICCUP
MAX LEVCHIN / AFFIRM
TIM WESTERGREN / PANDORA
ANTHONY WOOD / ROKU
+MANY MORE
Request an invitation.
1 2 3 4 5 6 7 8 9 10 11 05.21.14 www.bloombergbriefs.com
Bloomberg Brief | Private Equity
10
Listed Private Equity
Apollo Global Management’s shares are down more than 5 percent over the past week, bringing year-to-date declines to 23 percent. Fifteen ana
lysts surveyed by Bloomberg have buys on the stock, and four have holds. The consensus 12-month target price is $34.79.
Listed Firms and Funds
NAME
3i Group PLC
Altamir Amboise
Apollo Global Mgmt.
Ares Management
Blackstone Group
Brait SE
Capman OYJ
Carlyle Group
Deutsche Beteil.
Dinamia Cap. Priv.
Electra PE
Eurazeo
Fortress Investment Group
GIMV NV
GP Investments Ltd.
HGCapital Trust
Jafco
KKR
Oaktree Capital Group
Onex Corp.
Partners Group Holdings
Wendel SA
TICKER
III LN Equity
LTA FP Equity
APO US Equity
ARES US Equity
BX US Equity
BAT SJ Equity
CPMBV FH Equity
CG US Equity
DBAN GR Equity
DIN SM Equity
ELTA LN Equity
RF FP Equity
FIG US Equity
GIMB BB Equity
GPIV33 BZ Equity
HGT LN Equity
8595 JT Equity
KKR US Equity
OAK US Equity
OCX CN Equity
PGHN SW Equity
MF FP Equity
U.K.
Europe
U.S.
U.S.
U.S.
S. Africa
Europe
U.S.
Europe
Europe
U.K.
Europe
U.S.
Europe
S. Amer.
U.K.
Asia
U.S.
U.S.
Canada
Europe
Europe
LAST
PRICE
396.1
10.75
24.33
17.89
30.54
5631
1.06
30.89
19.35
8.26
2695
58.66
7
37.35
4.18
1065
3590
23.21
50.69
61.88
227.7
109.5
REGION
LAST PRICE
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
14.79
8.18
17.01
8.58
9.33
9.794
3.355
14.19
9.93
8.05
16.325
13.356
REGION
LAST PRICE
Europe
Europe
U.K.
Europe
U.K.
Europe
U.K.
Europe
U.K.
U.K.
81.5
11.6
225.5
11.325
0.75125
10.75
1113
6.52
211.75
423.9
REGION
1W
%CHG
-1.02%
-3.59%
-5.29%
4.31%
3.14%
-1.73%
-0.93%
-2.09%
-0.77%
0.36%
-0.19%
-1.80%
1.60%
-0.36%
0.97%
0.57%
-9.91%
0.48%
0.32%
-1.70%
-7.29%
-2.71%
YTD
%CHG
2.86%
4.17%
-23.03%
YoY
%CHG
9.24%
24.71%
-7.60%
52W
Min
312.6
8.5
21.8
17.2
19.8
3,472.8
0.8
24.2
18.0
5.6
2,176.0
37.7
6.4
36.0
3.4
998.0
3,275.0
17.8
49.5
46.4
208.9
77.8
Average
Last
30.90%
49.66%
24.71%
0.42%
7.55%
48.10%
18.77%
49.12%
-3.58%
-5.92%
-10.11%
-7.15%
-16.90%
11.00%
-8.86%
23.39%
-6.33%
23.38%
MARKET
CAP
3,849,364,665
392,507,236
9,249,859,375
3,781,295,448
34,511,035,156
28,922,655,986
89,603,676
10,078,079,102
264,637,547
134,466,192
952,483,948
4,022,286,694
3,014,751,709
923,470,533
604,186,951
397,508,026
173,376,666,240
18,599,599,609
7,993,763,672
6,877,884,766
6,079,590,000
5,321,823,735
-3.05%
7.38%
-7.02%
-13.28%
-3.10%
18.00%
13.24%
8.10%
-18.22%
-1.68%
-2.79%
5.45%
-37.24%
-4.64%
-13.85%
7.90%
-4.29%
3.35%
1W
%CHG
-2.31%
3.15%
0.71%
1.30%
2.41%
1.91%
-1.32%
0.78%
0.30%
1.64%
2.93%
3.21%
YTD
%CHG
-5.43%
-3.48%
-4.00%
-8.04%
0.86%
2.34%
-23.75%
-5.65%
-11.50%
-0.25%
-2.71%
-19.01%
YoY
%CHG
2.64%
-6.62%
-6.36%
-15.96%
-13.69%
13.23%
-34.85%
-5.93%
-9.23%
-27.74%
4.77%
-12.83%
MARKET
CAP
3,963,140,809
1,936,544,251
5,073,567,223
640,565,125
1,298,155,273
205,675,567
218,055,370
735,255,371
3,400,030,967
268,611,933
590,965,327
452,837,878
52W
Min
11.9
7.4
16.4
8.4
9.0
7.8
3.2
13.9
9.8
7.8
15.0
0.0
Average
Last
1W
%CHG
-3.55%
-9.38%
0.22%
-0.22%
0.17%
-0.69%
0.91%
1.09%
1.19%
-0.02%
YTD
%CHG
5.50%
-2.93%
8.67%
10.49%
3.09%
14.33%
8.27%
3.49%
3.80%
-1.88%
YoY
%CHG
-8.43%
-8.27%
10.54%
21.27%
-2.75%
18.59%
5.70%
-8.17%
14.15%
4.41%
NAV %
DISC/PREM
-29
-19
na
-24
-33
-19
-18
-24
na
na
52W
Min
74.0
11.6
199.0
9.5
0.7
8.8
1,017.0
6.2
180.5
374.0
Average
Last
52W
Max
421
11.4
36.22
19
35.18
5975
1.21
37.91
22.66
8.4
2775
63.4571
9.12
40.37
4.8
1247
5830
26.3
61.68
64.09
271.5
116.1
BDCs
NAME
American Capital
Apollo Invest.
Ares Capital
Blackrock Kelso Capital
Fifth Street Finance
Gladstone Capital
MCG Capital
New Mountain Capital
Prospect Capital
Kohlberg Capital
TCP Capital
THL Credit
TICKER
ACAS US Equity
AINV US Equity
ARCC US Equity
BKCC US Equity
FSC US Equity
GLAD US Equity
MCGC US Equity
NMFC US Equity
PSEC US Equity
KCAP US Equity
TCPC US Equity
TCRD US Equity
52W
Max
16.28
9.15
18.51
10.3
10.96
10.32
5.49
15.35
11.61
11.26
17.97
16.97
Listed Funds of Funds
NAME
Aberdeen Private Equity Fund
Castle Private Equity
F&C Private Equity Trust
HarbourVest Global PE
JPMorgan PE Ltd.
NB PE Partners
Pantheon Intl Partic.
Princess Private Equity
Standard Life Euro. PE Trust
SVG Capital
TICKER
APEF LN Equity
CPEN SW Equity
FPEO LN Equity
HVPE LN Equity
JPEL LN Equity
NBPE LN Equity
PIN LN Equity
PEY LN Equity
SEP LN Equity
SVI LN Equity
Source: Bloomberg. Prices updated at 5 p.m. NYT. Prices in local currencies.
1 2 3 4 5 6 7 8 9 10 11 52W
Max
88
14.45
229.5
11.35
0.8025
10.825
1115
7
211.75
466
05.21.14 www.bloombergbriefs.com
11
Bloomberg Brief | Private Equity
Q&A
New Supplies and Midstream Operators Create Opportunities for EnCap Flatrock
Q: You raised your fund in a matter of
months. What attracted investors to
the offering?
A: At the end of the day, it begins and ends
with the fundamental investment opportuni
ties that are out there. When it comes to
midstream, we are at a point where you
have the intersection of two very exciting
things happening at once. The first thing is
the development of all of the supply coming
out of the resource plays. What we have
been calling unconventional production over
the last several years has been redefined
as the new conventional. The other thing
that is exciting right now is the rise of the
independent midstream service provider.
Over the last 10 years, a number of smaller
private equity-backed teams or private
companies have been able to come in and
meet the needs of customers in different
ways than some of the bigger players in
the business can do. When you take those
themes and important trends that are go
ing on in midstream and you look back at
some of the success we and other investors
have enjoyed over the last 10 years, it has
elevated investor knowledge and awareness
of the opportunity. It assisted us in having a
very efficient raise for the fund.
Q: How did your investor base change
from the last fund?
A: About 90 percent of the investors in
EFM II by dollar commitment have come
back and are participating in Fund III. The
vast majority of the other investors we
have in that fund are made up of investors
we have in EFM I and other predecessor
EnCap funds.
Q: How will the deal size change from
the prior funds?
A: Initial commitment sizes will be plus
or minus $250 million. In the prior funds,
we were making initial commitments of
around $150 million on average, and then
finding we needed to upsize those later.
The amount of capital that is needed to
be successful in this business is larger
than the initial commitments we made in
EFM I and EFM II. This larger fund is going
to give us the ability to make larger and
right-sized commitments from the offset
with these teams. Having said that, I think
there will be some situations where teams
that get traction will need more capital than
the initial commitments. While the commit
ments will be larger, the actual investment
quantum of capital for what these teams do
will be a little bigger, but not substantially.
producers to develop supply have really
been the leading edge of what creates
the midstream opportunities we perceive.
I would contrast that to the early days of
what we did in EFM I in a time when gas
prices were stronger and there was more
gas mixed into the portfolio than what we
expect to see now.
Q: Will you expand investments into
any new areas?
A: We continue to stay very focused in
North America. We see a number of places
around the U.S. where we think there is
great opportunity. At the end of the day, it
is driven very much by what the produc
ers are doing on the upstream side of
the business and where they are hav
ing economic success. If you look at our
portfolio companies, you will find that they
are diversified around a variety of different
places here in the lower 48 and cut across
a number of different segments of the busi
ness. We think there are great emerging
opportunities in Canada and have a good
amount of focus on what those opportuni
ties could end up being. We’re also aware
there are significant reforms going on right
now in the energy business in Mexico. In
the near-term, you can still expect the vast
majority of what we will be doing is going
to be focused in the lower 48 states.
Q: How has the opportunity set
changed from when you raised your
last two funds in 2012 and 2010?
A: The opportunity set at a high level is
very similar. The majority of our invest
ment opportunities will be new construc
tion, greenfield development, but there will
be some acquisitions we will do along the
way. Over the last two or three years, we
have seen more strength in liquid prices
for crude oil, condensate and rich natural
gas streams that contain natural gas
liquids. Those favorable economics for the
Based: San Antonio, TX
Hometown: Texas Riviera, born in Kingville, TX
Professional Background: Managing Partner, EnCap Flatrock Midstream
(2008-present); Partner, Flatrock Energy Advisors (2002-2008) ; VP, Enron
(1992-2002); Engineer, Texas Oil & Gas Corp. (1984-1992)
Education: BS in Petroleum Engineering, Texas A&M; MBA, Texas A&M
Recommended Reading: Seven Days in Utopia: Golf’s Sacred Journey by
David L. Cook
Hobbies: Hunting, clays shooting, endurance sports, golf
Sports Team: Texas A&M Aggies
Favorite Restaurant: Brennan’s (Houston)
PE FIRMS ARE TOP BUYERS OF 2013:
1 2 3 4 5 6 7 8 9 10 11 MA
<GO>
William Lemmons, managing partner at EnCap
Flatrock Midstream, spoke with Sabrina Willmer
about how it gathered $3 billion for its latest fund
and where it is finding midstream opportunities.
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