Chris Witkowsky
Any hint of drift, or hiccup in performance, or even drama in the ranks, could be a reason for an LP to skip out on the next fund. It’s a precarious environment right now.
As part of the process, the firm is letting go of some staff, including managing directors Helen Chiang and Loren Easton, who have moved into senior adviser roles.
GP-led deal volume reached an estimated $28bn in the first half, a 56% increase from the same period last year, according to Jefferies’ first-half volume report.
Instead of a flood of LPs backing away from the asset class, there appears to be some tactical maneuvering to help institutional portfolios stay in balance.
The firm was best positioned to know the asset well, which helped inform its ability to set an appropriate price, Kian managing partner Kevin McCarthy said in an interview.
Some private equity-backed assets have grown so large that only a handful of other sponsors or strategic buyers could acquire them outright.
Clearlake’s deal, one of a string of such transactions put together by the firm, is part of a wave of GP-led secondaries keeping the market busy.
Co-investment stakes included in GP- and even LP-led secondaries have become more prevalent as even direct investing LPs seek liquidity in the slow exit environment.
Fundraising commenced last year and was essentially finished around year-end but stayed open to allow in last-minute investors.
In a recent Probitas Partners survey, 75% of 69 institutional investor respondents said they were interested in exploring new firm spin-outs. Only 2% of respondents had no interest in first-time funds.