Guardian Life Likes Small, Mid-Market Funds In 2010

Guardian Life Insurance Company of America is zeroing in on the smaller end of the buyout market in its quest to commit $200 million to the asset class in 2010.

David Turner, managing director and head of private equity, told Buyouts on the sidelines of PEI’s Emerging Markets Investor Forum, that although he hasn’t yet determined which general partners will garner pledges, he’s looking at buyout funds that range in size from $200 million up to about $2 billion, and he is also interested in secondaries. Guardian Life’s pledges average $15 million to $25 million, with special situations funds sometimes getting pledges of $30 million.

Turner noted that his portfolio is about 65 percent buyouts and 25 percent special situations, with the rest in venture capital. Guardian Life’s private equity allocation stood at 0.7 percent, with a net asset value of $200 million, as of Dec. 31, 2009. The target allocation to private equity is 2.5 percent.

In 2009, the LP committed to a handful of venture capital funds and a couple of small buyout funds and made a secondary purchase of a portfolio of more than a dozen funds from an institutional investor. Pledges last year went to Bunker Hill Capital, which makes control investments in lower mid-market companies; Grey Mountain Partners, which invests in smaller mid-market companies; Phoenix Equity Partners, a U.K.-based mid-market buyout firm; and Prophet Equity, which makes control equity investments in lower and mid-market companies.

Past commitments have gone to Evergreen Pacific Partners, a private equity firm focused on the middle market, mid-market buyout firm Pfingsten Partners LLC and Foundry Group, an early-stage venture firm.