AlpInvest’s fifth secondary fund hits $750M; focus on separate accounts

The secondaries fundraising effort surpassed the previous $2.2 billion program raised between 2009 and 2011. AlpInvest booked 18 new investors,including sovereign wealth funds, public pensions, corporate pensions, insurance companies, asset managers, and foundations in North America, Latin America, Europe, Africa, the Middle East and Asia-Pacific.

“We are seeing very significant GP-centered opportunities in the market at the moment around spin-outs, fund restructurings and staple transactions,” Jacques Chappuis, head of Carlyle Solutions, said in an email to Buyouts. “There are also attractive opportunities to acquire portfolios of LP positions, specifically as institutional investors continue to reshape their portfolios.”

Overall, secondaries offer limited partners shorter duration and earlier liquidity than typical private equity funds, as well as earlier deployment of capital and a “smoothening of the J-curve” of returns, Chappuis said. Secondaries also allow LPs take advantage of asset visibility and the benefits of diversification, he said.

AlpInvest will consider co-mingled funds to address particular markets, with no specific timetable, according to a source familiar with the firm. No general fund-of-funds is currently in the works, the source said.

AlpInvest remains focused on separately-managed accounts for its clients, including co-investment, mezzanine, real estate, U.S. middle market, European middle market, and emerging markets, as well as diversified programs, according to a source.

A spokeswoman for AlpInvest declined to comment.

In one recent development, AlpInvest added two more funds-of-funds to its management role in Indiana: the Indiana Future Fund (IFF), a $72.6 million fund of funds, and its $58 million successor, the INext Program.

Limited partners in the IFF include Eli Lilly and Company, the Indiana Public Retirement System, the Indiana University Foundation, Indiana University, Purdue University, Indiana State University, Ball State University Foundation, American United Life Insurance and WellPoint. The IFF and the INext funds bring Carlyle and AlpInvest’s total funds under management in the Hoosier state to $438 million, including the duo’s win of the Indiana Public Retirement System’s Indiana Investment Fund I earlier this year.

One of the largest private equity investors in the world, AlpInvest Partners recorded more than $48 billion of assets under management as of June 30. Carlyle Group bought the remaining 40 percent of the Dutch investment manager earlier this year. It took a 60 percent stake in the firm in 2011.

All told, AlpInvest has committed $9.1 billion through 84 transactions in secondaries in the past 11 years. Its 22-person secondaries team is based in New York, Amsterdam and Hong Kong.