Leonard Green & Partners is working on a process to move assets out of its 2007 fund and into a continuation pool, giving the GP more time to manage the investments, three people with knowledge of the situation told Buyouts.
The firm is one of several high-profile GPs using the secondaries market to move assets out of older funds for more time to manage them. Others in market include Hellman & Friedman, Audax Capital Group and Summit Partners.
Los Angeles-based Leonard Green’s secondaries process is still in its early days, sources said. It’s expected to go out to limited partners in the fifth fund in January, one of the sources said. At that point, existing LPs will vote on whether they want to sell their interest in the fund, or roll them into the continuation vehicle.
Evercore is working as secondaries advisor on the process. The bank has represented the bulk of GP-led secondary deals this year.
No one from Leonard Green responded to a comment request Wednesday. The firm closed Green Equity Investors V on $5.3 billion in 2007. Fund V was generating an 18.1 percent net internal rate of return and a 2.2x multiple as of March 31, 2020, according to performance information from the California Public Employees’ Retirement System.
Green Equity Investors V had about $2.2 billion of gross asset value as of March, according to the firm’s most recent Form ADV.
It’s not clear exactly which assets are included in the sale. Current investments in Leonard Green’s portfolio made during the timeframe Fund V was investing are: AerSale Holdings (2010), Aspen Dental (2010), Authentic Brands Group (2010), CHG Healthcare Services (2012), The Container Store (2007), Jo-Ann (2010), Prospect Medical Holdings (2010) and Union Square Hospitality Group (2012), according to the firm’s website.
Leonard Green was formed in 1989 and is focused primarily on service industries in consumer, business and healthcare, and retail. The firm closed its most recent flagship pool, Fund VIII, on $12 billion last year.