Firms & Funds

Alaska-UK-Kuwait fund invests $150 mln in energy-focused PE firm

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Capital Constellation, Alaska Permanent Fund Corp, RMPI Railpen, Wafra, Public Institution for Social Security of Kuwait, pension fund, private equity
Logo courtesy Capital Constellation.
  • Why is this important: Three large LPs are backing next-generation PE managers
  • Parent firms’ AUM: $200 bln

 

Institutional-investor-backed Capital Constellation made its second deal, investing $150 million in Ara Partners, a PE firm that invests in middle-market opportunities across the global energy and industrial sectors.

Constellation is a collaboration of Alaska Permanent Fund Corp, RMPI Railpen, the U.K.’s largest pension fund, and investment adviser Wafra on behalf of Public Institution for Social Security of Kuwait, the national retirement scheme.

Together the three institutions, with more than $200 billion in assets under management, have committed $700 million to Constellation.

Constellation aims to provide long-term capital to the next generation of promising PE and alternatives managers. It expects to deploy more than $1.5 billion in the next five years, a news release said.

“In a sense we are LPs, supporting the growth of next-gen private equity managers who will build enduring businesses,” said Daniel Adamson, managing director of Wafra and president of Constellation.

Ara invests in global energy and industrial sectors under the banners of AEM Advisers, Intervale Capital, Bayou City Energy, Cibolo Energy Partners, Junction Energy Capital, Aksiom Partners and Teleios Commodities, the news release said.

Constellation’s first investment, $100 million, was to Astra Capital Management, co-founded by five executives including former Carlyle Managing Director Mark Johnson and former Grande Communications President Matthew Murphy. The PE firm invests in communications and technology services companies with enterprise values up to $500 million.

Constellation’s two investments so far have a middle-market focus, but Constellation is not limited to that part of the market, Adamson said.

Constellation is looking for “catalytic” managers, he said. “It is rare to find both great investment acumen and business-building talent combined on a single DNA strand,” Adamson said.

Action Item: Read more on Capital Constellation: https://capitalconstellation.com/