Emerging manager Banneker eyes pre-fund asset Linq for GP-led deal

Banneker Partners, which is embarking on fundraising for its second pool, is eyeing a deal for Linq, its pre-fund asset, that would give the firm more time and capital for the business, three sources told Buyouts.

The deal, a single-asset secondary, would be among a selection of mid-market processes GPs are running to extend their holds over certain assets. The GP-led market has exploded since the pandemic as GPs look to hold certain businesses longer than allowed under the terms of traditional PE funds.

However, secondaries overall appears to be slowing down amid uncertainty around pricing. The macro environment, with public market volatility spurred by inflation, supply chain delays and geopolitical shocks, is making it harder for secondaries deals not already locked in to get done without potential renegotiations, sources have told Buyouts.

Banneker wants to move Linq into a continuation pool in a deal valued at up to $500 million, two sources told Buyouts. The deal also would provide early pre-fund investors with liquidity, one of the sources said.

It’s not clear if the deal is live in the market, or still being contemplated. Banneker is working with Park Hill Group on the offering.

Banneker invested in Linq in 2018. The company provides software and services to school districts. Under Banneker’s ownership, Linq has made at least 10 add-ons to the platform, according to Banneker’s website, including Colyar Technology Solutions and Titan School Solutions.

Earlier this year, Welsh Carson Anderson & Stowe made a strategic investment in Linq. Generally, firms have used auction-based M&A minority stake sales to set the valuation of a company for a subsequent secondaries deal. It’s not clear if that’s the case with Linq.

A spokesperson for Banneker did not respond to a comment request.

Banneker is raising its second fund, targeting $350 million with a $500 million cap, Buyouts previously reported. The firm is led by ex-Vista Equity executive Stephen Davis, along with partner Matthew McDonald, and operating partners Harjot Sachdeva and Darryl Lewis.

Banneker invests in enterprise software businesses, with annual revenue of up to $50 million. The firm looks to work with management to help scale the business through organic growth and acquisitions.

Banneker invested deal-by-deal prior to raising a fund, investing around $250 million across four deals, the source said. Since 2018, Banneker has closed 11 platform acquisitions and 30 add-ons, the person said.