- Vector manages $500 mln credit assets, half in hedge fund
- Dyal investment to grow business, launch new products
- Neuberger’s Dyal now partnered with 13 PE, 14 hedge funds
The minority stake sold by Vector Capital to Dyal Capital Partners amounts to less than 10 percent of the management company, according to a source with knowledge of the deal.
The transaction is intended to help accelerate the growth of Vector’s credit business. It has no connection to succession or operational changes, the source said.
Dyal is Neuberger Berman’s business for acquiring passive minority interests in alternative-asset management firms. Based in San Francisco, Vector is a technology-focused private equity firm with $3.8 billion under management.
Vector launched its credit business in 2008 and manages around $500 million in credit assets, the source said.
Around half that AUM is in Vector Capital Credit Opportunity Fund, a hedge fund that pursues liquid strategies and direct lending. The other half is part of the PE business, which invests up and down the capital structure. Last year, Vector closed its fifth PE fund on $1.4 billion.
Vector’s private equity and credit sides are managed by different teams, though the latter helps source deals for the former. Vector could potentially launch new credit products in connection with Dyal’s investment.
In January, Vector announced the restructuring of Funds II and III (vintages 1999 and 2005, respectively). The $450 million transaction was led by Goldman Sachs Asset Management’s Vintage Funds and GIC, which became the funds’ largest LPs.
Dyal has previously purchased stakes in 12 PE firms, including Vista Equity Partners, TPG Sixth Street Partners, Silver Lake and Platinum Equity, as well as 14 hedge funds.
In December, Dyal announced an investment in Cerberus Business Finance, the middle-market lending platform of Cerberus Capital Management.
Dyal is raising Fund IV, targeting with $5 billion with no hard cap, Buyouts reported last year.
Action Item: Check out Dyal’s full list of partner firms here.
The San Francisco Bay Bridge at sunset, with the city in the background, on Aug. 11, 2017. REUTERS/Alexandria Sage