Deutsche Bank spin-out Glendower targets $3.5bn for fifth secondaries fund

As the secondaries market revs up after last year’s covid seize-up, Glendower Capital is gearing up for the expected deal rush, promoting staff internally and raising its second multi-billion-dollar vehicle in the last three years.

Glendower is targeting $3.5 billion, with no hard-cap, for its latest secondaries offering, Glendower Secondary Opportunities Fund V, according to documents from Louisiana State Employees’ Retirement System. That’s up from Fund IV, which closed on $2.7 billion in 2019.

Fund V is Glendower’s second pool raised as an independent firm after a group of executives spun out from Deutsche Bank in 2017.

The fund will have global scope and target both LP stakes and GP-led transactions with a diversified sector focus. The firm will target LP stakes deals between $5 million and $500 million and GP-led deals between $100 million and $500 million. The fund will make between 50 and 60 investments during a four-year investment period.

Glendower, based in London and with offices in New York, targets the middle and large buyouts market, but also invests in growth equity and other categories. Fund V will be allocated 45 percent each to North America and Europe, with 10 percent going to Asia and the rest of the world.

LPs in the fund will pay a 1.25 percent management fee during the investment period, which will step down to 1 percent of capital for the following two years. After that, LPs will pay either 90 percent of the annual profit share for the prior year or 0.25 percent of invested capital, depending on which is the greater sum. The fund has an 8 percent hurdle and charges a 12.5 percent carried interest.

Glendower will commit either 1 percent of total commitments or $35 million to the fund, depending on which amount is smaller.

The firm’s leadership includes chief executive officer and managing partner Carlo Pirzio-Biroli, chief investment officer and managing partner Charles Smith and chief operating officer and partner Deirdre Davies. Other partners include Adam Graev, Chi Cheung, Rikesh Mohandoss and Emilio Olmos. Partner Joshua Glaser is in charge of investor relations.

Mohandoss and Olmos were just promoted to partner in February, according to Secondaries Investor.

Its previous funds have all performed well. As of December 31, Fund IV had a 23 percent internal rate of return and a 1.3x total value to paid-in multiple. Fund III, a 2014 vintage raised before the spin-out, had a 13 percent IRR and 1.4x multiple. Its first vehicle was raised across four pools with two different vintages. The 2006 vintage has a 22 percent IRR and a 1.84x TVPI while the 2010 vintage had a 29 percent IRR and a 2.32x TVPI.

Glendower did not respond to a request for comment.

Action Item: read Glendower Capital’s Form ADV here.