DeVos family-backed GP stakes fund places first bet on Newbury

Newbury Partners is marketing a fifth secondaries offering with a target of $1.75bn and a hard cap of $2bn, Buyouts reported last November.

RidgeLake Partners, a GP stakes fund co-sponsored by the DeVos family, appears to have made its first investment in a secondaries firm in fundraising mode.

RidgeLake acquired a minority stake in Newbury Partners, a buyer of interests in mature buyout, growth equity and venture capital funds. The size of the stake was not disclosed. In a statement, Newbury said the deal will support its future growth and reinforce alignment with global limited partners.

Newbury is marketing a fifth secondaries offering with a target of $1.75 billion and a hard cap of $2 billion, Buyouts reported last November. It is possible that RidgeLake’s investment will help boost GP commitments to the new pool.

Newbury did not respond to a request for comment on this story.

RidgeLake was recently created by sponsors PA Capital, an investment arm of New York Life Insurance Company, and Ottawa Avenue Private Capital, an investment advisory affiliate of the DeVos family. The DeVos family’s highest-profile member is Betsy DeVos, the Trump Administration’s education secretary.

RidgeLake is headed by Michael Lunt, an Ottawa Avenue managing director, and Todd Milligan, a PA managing director. It invests minority capital in mid-market private equity firms with a focus on buyout, growth equity, distressed, secondaries and real assets strategies.

RidgeLake was seeded with $500 million by the parent organizations of PA and Ottawa Avenue, Buyouts’ sister title Private Equity International reported in August. The goal is to supplement this capital by raising third-party commitments, the report said.

Stamford, Connecticut’s Newbury appears to be the GP stakes fund’s inaugural deal. RidgeLake did not respond to a request for comment.

GP stakes funds acquire minority interests in PE firms in exchange for a share of income. Managers are motivated to sell pieces of themselves to bolster balance sheets, fund priorities – such as GP commitments to offerings and growth initiatives – and gain a long-term, value-adding partner.

Investing by GP stakes funds ramped up in the past few years, mostly engaging large brands in the North American PE industry. Deals have more recently targeted mid-market firms, typically with $2 billion to $8 billion in assets, a July report by Pitchbook said. The environment is rich in sellers, the report noted, favoring a small number of buyers.

RidgeLake is one of the newer mid-market players. Other players include Azimut Alternative Capital Partners, Bonaccord, Hunter Point Capital, Investcorp and Stonyrock Partners.

Ottawa Avenue is indirectly owned by the family of Richard and Helen DeVos, according to the firm’s ADV filings. Richard’s son Dick is married to Betsy DeVos, née Prince. Ottawa Avenue also invests minority capital on a direct basis, last year backing Europe’s Nordic Capital.

Ottawa Avenue was earlier this year shopping a portfolio of PE fund stakes worth up to $1 billion and perhaps as much as $2 billion, Buyouts reported in July. The secondaries process drew HarbourVest Partners as a lead investor, the report said.

Newbury was founded in 2006 by managing partner Richard Lichter, a veteran secondaries investor who previously held top executive roles at Auda Private Equity and Lexington Partners. Specializing in small and mid-sized deals of up to $250 million, the firm has done 250-plus transactions and committed $4.5 billion of LP capital.

Newbury launched Fund V with the objective of remaining “the biggest small guy” in secondaries, a source told Buyouts last year.

Action Item: Learn more about Newbury Partners here.