Aea Investors sells minority stake to DeVos family office

Aea Investors sold a piece of its management company to the investment firm managing the fortune of the DeVos family, sources told Buyouts.

Aea is one of numerous firms that in the past few years have sold minority stakes in their management companies to outside investors. Several firms like Dyal Capital and Goldman Sachs have raised billions of dollars to buy GP stakes in private equity firms.

The deal happened last year, according to a letter that went out to LPs in the fall. The terms of the deal are not clear, nor is the size of the stake purchased by the family office, called RDV Corp. Ginny Seyferth, a spokeswoman for RDV Corp, declined to comment.

Generally these deals are structured to cash out senior partners or build a base of permanent capital to expand into new strategies or to fund future GP commitments — or a combination of both cashouts and permanent capital.

While many such deals involve buyers who raised money specifically to buy GP stakes, some LPs have bought into their longtime partners. Last year, Riverside Co said it had sold a 10 percent stake in the management company to the Cleveland multifamily office Parkwood LLC.

RDV has been an LP in Aea funds, one of the sources said. RDV is the family office of Richard DeVos, co-founder of multilevel-marketing giant Amway. Richard’s son, also Richard, is married to Betsy DeVos, née Prince, who last year became President Donald Trump’s education secretary.

In a letter to ethics officials at the Department of Education early last year, Betsy DeVos expressed her intention to divest her interests in 102 entities to avoid conflicts of interest.

Those entities included numerous PE funds from managers like Lee Equity Partners, Vista Equity Partners, Rhone Partners, Partners Group and AEA Investors, according to the letter.

Aea closed its most recent flagship pool, AEA Fund VI Investment, on $3.2 billion in 2016. That same year, the firm closed its third small-business fund on $443 million. The firm also has a series of mezzanine funds.

Aea is one of the pioneering firms in the industry. It dates to 1968 when it was founded by interests of the Rockefeller, Mellon and Harriman families with S.G. Warburg & Co.

No one from Aea responded to an email to a general information address at the firm. A woman who answered the phone at the New York office said the firm does not speak to the media and declined to take questions.

Action Item: Check out Aea’s Form ADV here: http://bit.ly/2neNW0t

Photo: U.S. Education Secretary Betsy DeVos speaks at Harvard University‘s Kennedy School of Government in Cambridge, Massachusetts, on Sept. 28, 2017. Photo courtesy Reuters/Mary Schwalm