AlpInvest re-hires Costello to run European secondaries

AlpInvest Partners, backed by Carlyle Group, has brought back into the fold an executive who left for a few years to work on secondaries with the Canada Pension Plan Investment Board.

Neal Costello, a senior principal at CPPIB who joined in 2013, has re-joined AlpInvest as a managing director on its secondaries team. He will be based in Amsterdam and responsible for leading and overseeing the firm’s European team.

Costello worked at AlpInvest from 2003 to 2013, a stint that included time in Hong Kong working with AlpInvest’s Asia team. At CPPIB, Costello led the pension’s European secondaries and co-investments platform in London.

Wouter Moerel, who heads Alpinvest’s secondaries team and is a member of the operating committee, said Costello’s re-hire was “logical” given his history with the firm.

“We wanted to go with someone we knew,” said Moerel, who added that Alpinvest had been looking for a while to add to its European team.

Costello is not replacing Tjarko Hektor, who formerly co-led the firm’s secondaries team, Moerel said. AlpInvest has had no plans to directly replace Hektor, who left to pursue other opportunities, he said. Hektor is seen as a major figure in the private equity secondary world.

Costello joins AlpInvest at a time of high activity in the secondary market – with large pension fund portfolios trading and an increasing number of GPs seeking to restructure older funds through secondary transactions. Total deal activity on the secondaries market last year was $42 billion, a record and increase of more than 50 percent from 2013, according to Cogent Partners.

Moerel said he’s concerned about excessively high valuations in the secondary market, as they “add leverage, which adds incremental risk and are not worth it.”

AlpInvest invests in the secondary market through its fifth secondary fund, which hit its $750 million hard cap in 2013, bringing its overall secondaries program to $4.2 billion.

Overall, AlpInvest’s assets under management totaled $45.3 billion as of March 31.

CPPIB had no comment on Costello’s departure.