Declaration Partners explores secondary as anchor LP David Rubenstein seeks liquidity

Growth-focused shop Declaration Partners is exploring a GP-led secondary on several assets to generate liquidity for the firm’s anchor limited partner, Carlyle Group co-founder David Rubenstein, sources told Buyouts.

The deal, facilitated by adviser Fairview Capital Group, would allow Rubenstein to sell partial stakes in the assets, which will support his investment in the Baltimore Orioles Major League Baseball franchise, the sources said.

The deal is among numerous GP-led processes in the market this year that GPs are using to deliver liquidity to LPs in older funds and assets. Exit activity and proceeds flowing back to fund investors remain slow, especially at the larger end of the market, forcing LPs to explore other ways to generate liquidity from their private equity portfolios.

Pricing in secondaries has strengthened, making such deals even more attractive for GPs and LPs.

Declaration Partners, which reports about $2.1 billion under management across its private market strategies, is an independent growth equity firm formed in 2017. The firm is separate from Rubenstein’s family office called Declaration Capital.

Led by Brian Frank and Todd Rich, Declaration wants to run a process on at least three of its assets, which are to be determined, one of the sources said. Total net asset value would be around $75 million, the source said.

Swiss private bank Lombard Odier, which has a secondaries practice, is set up as a major investor in the process, sources said. Rubenstein’s partial stakes would be aggregated and sold off, the source said.

A provision of the deal being discussed would have investors also commit to future funding rounds, a source said.

The deal is a smaller version of an earlier transaction the firm explored, but ultimately pulled, that focused on around 11 of its assets and involved about $320 million of net asset value (before applying discounts). Bids for the assets came in at an aggregate discount of around 30 percent, sources said.

Rubenstein led an investor group that acquired a stake in the Baltimore Orioles in March from the Angelos family in a deal valued at about $1.7 billion.

Other investors included several Ares Management senior executives: CEO Michael Arougheti, and co-heads of Ares’ credit group Mitchell Goldstein and Michael Smith. The group also includes high-profile individuals in Maryland like former Baltimore mayor Kurt Schmoke, Michele Kang, owner of the Washington Spirit, and MLB Hall of Famer and former Orioles player Cal Ripken Jr, according to a statement from law firm Jones Day, which advised the Orioles on the sale, and MLB.

Declaration Partners’ is among a flurry of activity on the GP side of secondaries. So far this year, secondary deal volume is estimated around $27 billion-$32 billion, according to PJT Park Hill’s quarter volume update. PJT Park Hill estimates around $200 billion of live and upcoming secondary supply.