Auda Hears Strong Demand

While the giants in the secondary business continue to raise larger funds and compete with one another to put those funds to work, one veteran of two of the secondary world’s giants is making smaller investments in a private equity firm that is new to the secondary sector. Richard Lichter, a former director at Landmark Partners and a founder of Lexington Partners, had an extra reason to celebrate the Independence Day holiday. His current firm, Auda Advisor Associates, just held a final close on its inaugural fund.

Auda Secondary Fund was oversubscribed and closed with $410 million, $10 million above its target. It had a first close of $133 million last August. Its limited partners include the 3i Pension Fund, New York Life Insurance, MetLife, SunAmerica and the government of Sweden’s AP3 investment fund. The firm did not disclose any information on the fund’s fee or carry structure, except to say that its terms are “very standard.”

Lichter expects that 75% of the fund’s purchases will be for U.S. buyout assets. The remaining 25% will be in European buyouts, U.S. venture capital and U.S. mezzanine deals. The fund is open to buying assets that are fully funded or not funded at all.

Auda can invest between $5 million and $75 million per transaction, but it will likely invest an average of $15 million per deal. It has closed on or has contracts to close on deals that have already eaten up about $100 million from the fund.

So far these deals have been mostly for buyout assets, but it has also bought some venture assets. Most of the deals have been in the United States and the sellers have been mostly large financial institutions. Lichter says that his group is also talking to insurance companies, individual investors and other financial institutions about potential buys.

Auda Advisor Associates manages more than $2.8 billion. Its secondary group has four investment professionals and plans to add more soon..