Stone Point leaders begin transition amid $5.25 bln fundraise

  • Firm transitions to next tier of firm leaders: Hamilton Lane
  • Louisiana Teachers’ commits $75 mln to Fund VII
  • Fund VII targeting $5.25 bln

Documents from Teachers’ Retirement System of Louisiana indicate Stone Point Capital CEO Charles Davis and Chairman Stephen Friedman have passed certain management duties to other professionals at the firm.

While Davis has no plans to step down, he has slowly started to transition some of the firm’s operational and managerial responsibilities to other leaders at the firm. In addition to Davis and Friedman, Senior Principals James Carey, David Wermuth and Nicolas Zerbib also sit on the firm’s investment committee.

“Messrs. Davis and Friedman remain engaged with the portfolio and daily operation of the firm, their formal management responsibilities have been passed down, indicating Stone Point’s focus on transitioning the next tier of firm leaders,” a Hamilton Lane report included in Louisiana Teachers’ November meeting materials showed.

The report did not identify which members of the firm represent that next tier.

“The investment committee members have worked together at Stone Point for 18 years, and most of the principals have been promoted from within the organization,” Hamilton Lane wrote. “Stone Point has had little turnover, with only two senior-level departures since 2007, and has continually infused the junior level through annual associate recruiting.”

Stone Point could not be reached for comment.

Louisiana Teachers’ approved a $75 million commitment to Stone Point’s latest flagship fund at its Nov. 3-4 meeting, Deputy CIO Maurice Coleman told Buyouts in an email.

Stone Point set a $5.25 billion target for its latest fund, Trident VII LP, the Hamilton Lane report said. Buyouts previously reported Stone Point had been seeking $4.5 billion with a $5 billion hard cap, but increased the target to $5.2 billion. Fund VII attracted about $1.25 billion in a first close in September, Buyouts reported.

Trident VII will invest in around 25 financial-services companies, providing as much as $500 million of equity per deal, the Hamilton Lane report says. Typical Fund VII portfolio companies will have enterprise values of $100 million to $3 billion.

Stone Point’s previous fund, which held $4.5 billion in 2014, was netting a 10.8 percent internal rate of return and 1.1x multiple as of June 30, according to the Hamilton Lane report. Fund V, a $3.6 billion 2010 vintage fund, netted an 8 percent IRR and 1.3x multiple as of the same date.

Stone Point, based in Greenwich, Connecticut, with an office in New York City, has raised $13 billion since its inception in 1985 as a subsidiary of Marsh & McLennan Cos. The firm’s partners spun out as Stone Point in 2005.

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A surfer retreats behind a rock wall as a wave crashes onto Angourie Point on the far north coast of New South Wales on April 14, 2015. Photo courtesy Reuters/Will Burgess

Update: The story’s second paragraph was updated to include additional information about Stone Point’s transition.