FROM THE MINUTES - Bloomberg.com · commitments, beating the firm's $750 million target, according to the Bloomberg data. About 40 percent of that capital had already been committed

Wednesday

June 29, 2016

www.bloombergbriefs.com

Everbright Spinoff Forebright Plans Second FundBY AINSLIE CHANDLER, BLOOMBERG BRIEF

Forebright Capital Management, a firm that spun out of in China Everbright Ltd.2014, is planning to raise its second fund since becoming independent.

The fund is likely to have a $500 million target, , Forebright's chief operating Kiril Ipofficer, said in a telephone interview.

Fundraising should start in the first half of 2017, he said.In January, Hong Kong-based Forebright completed raising its first fund since spin

out, Forebright New Opportunities Fund, with $400 million in commitments, Ip confirmed to Bloomberg.

About $200 million of the fund has already been invested in 10 portfolio companies, Ip said. The firm counts university endowments and insurance companies from China, the U.S. and Europe among its limited partners, Ip said.

Forebright focuses on the Greater China region, targeting investments in business services, advanced manufacturing and healthy living sectors, Ip said.

Deal flow in China is "pretty strong," Ip said, and competition from other U.S.-dollar-denominated funds remains limited after a number of firms withdrew from the market.

Ip will visit the U.S. to meet investors in July, along with the firm's head of investor relations, .Li Calvin Chen

Forebright also continues to manage the three special opportunities funds its team raised as part of Everbright. One of those, China Special Opportunities Fund III, closed in 2010 with $400 million in commitments, according to data compiled by Bloomberg. That fund has a 1.6 times multiple of invested capital at May 31, Chen said in the phone interview.

Investors in that fund include Lockheed Martin Corp. and Hatteras Master Fund LP, according to the data compiled by Bloomberg.  

"We've already seen places like Berlin and Dublin gain ground, nipping on London's heels as startup centers. This is really the opportunity for them to pull ahead. The next question is, if the startups are going elsewhere, where do

"the VCs go.— Andy McLoughlin, partner, SoftTech

Partners, on the of Brexitimplications

12% — new allocation to target private equity at Alaska Retirement

 Management Board

Public Employees Retirement will Association of New Mexico

discuss a $75 million investment with Starwood on .June 30

FUNDRAISING. Lexington Partners is preparing to its fourth mid-raise market secondary fund.

BREXIT FALLOUT. put its U.K. EQT expansion plans while on hold HIGsees possible opportunities.

ALTERNATIVE FINANCING: Charles and David Koch are

as providing buyout financingconventional lenders retreat.

The strong dollar makes U.S. Q&A:funds to some overseas appealinginvestors, says , CIO of Tim Ng

.  Clearbrook Global Advisors

QUOTED

NUMBER OF THE WEEK

MEETING TO WATCH

IN THIS ISSUE

FROM THE MINUTES  COMPILED BY AINSLIE CHANDLER, BLOOMBERG BRIEF

Year-to-Date Fundraising by Regional Focus

June 29, 2016 Bloomberg Brief Private Equity 2

FROM THE MINUTES  COMPILED BY AINSLIE CHANDLER, BLOOMBERG BRIEF

Alaska Raises PE Allocation Target to 12%, Plans More Direct DealsCaisse des Depots, the state-owned

French investment body, is looking for French-headquartered firms to manage as much as 400 million euros in dedicated funds, according to a request for proposals. The money is to be invested in venture capital, growth capital and buyouts, with at least 80 percent to be invested in French companies. The money will be allocated in two lots, with an estimated 50 million to 200 million euros dedicated to up to two managers in each lot.Click here for RFP

Alaska Retirement Management Board's board of trustees boosted the pension's long-term private equity target allocation to 12 percent from 10 percent at its April 21-22 meeting, according to minutes of the session. The pension plans to commit $530 million to the asset class in 2016, including $200 million apiece for its fund-of-funds programs managed by and Abbott Capital

and Pathway Capital Management$130 million to direct fund investments. The board had $772 million invested with Abbott as of April 30, and $826.5 million with Pathway, according to a schedule included with the minutes. Those constituted 42 percent and 45 percent, respectively, of the ARM's $1.85 billion in private assets. The pension plans to gradually increase its direct fund commitments, according to the minutes. The pension's private equity portfolio has returned 460 basis points above the Russell 3000 Index since its inception, achieving an 11.2 percent net internal rate of return, State Investment Officer

said at the meeting.Zachary HannaClick here for minutes

Texas Municipal Retirement System's private equity holdings comprised 0.2 percent of the $23.9 billion total market value, well below the pension's 5 percent target, according to the pension's quarterly investment staff report. The pension's board approved a $75 million allocation to GSO Capital Opportunities Fund III LP in March and plans to invest a further $150 million per quarter in private equity in the second, third and fourth quarters of 2016.

Click here for staff report

Raven Capital Management LLC is asking investors to agree to delay the final close on its latest fund by as much as three months, according to documents from a limited partner.

Raven, which has been in the market for at least 15 months, has a $300 million target on the Raven Asset-Based Opportunity Fund III and a $350 million cap, Bloomberg Brief reported in June 2015.

The firm has asked investors to agree to push out the deadline to close to Oct. 1, according to the agenda for the June 24 San Joaquin County Employees

's board of retirement meeting.Retirement AssociationThat pension committed $50 million to the fund at its June 26, 2015 board

meeting, according to minutes.At that time, Pension Consulting Alliance said that Raven founder , a Josh Green

former Merrill Lynch & Co. managing director, would contribute only $1 million to the fund, a lower than average commitment for a fund of its size.

Other investors committed to the fund include Stanislaus County Employees' Retirement Association, Fire & Police Pension Association of Colorado and Merced County Employees Retirement Association.

New York-based Raven made its first regulatory filing announcing the raising on March 31, 2015. At that stage, it had not closed on any commitments to the fund.

Green did not respond to requests for comment.

Raven Capital Asks for More Time for Final Close

School Employees Retirement 's investment committee System of Ohio

has committed 25 million euros ($27.8 million) to Bridgepoint Development Capital III, according to its June 2016 board meeting highlights. Click here for meeting highlights

Public Employees Retirement is set to Association of New Mexico

discuss a staff recommendation to commit as much as $75 million to Starwood XI Management LP at its June 30 meeting, according to the agenda.Click here for agenda

's Ohio Police and Fire Pension Fundinvestment committee is due to discuss a core real estate review and strategic portfolio rebalancing, along with its 2016 real estate investment plan midyear review, at its June meeting, according to the agenda. It is also expected to hear its 2015 manager fee report.Click here for agenda

City of Fresno Retirement SystemsJoint Retirement Board was expected to approve a $30 million allocation to value-add opportunistic real estate at its June 28 meeting, according to the agenda. The pension's due diligence committee

recommended the board split that allocation between Oaktree Capital and PCCP. The committee recommended that $30 million be withdrawn annually from the system's REIT accounts for the next four years for the value-add strategy. The board is also expected to consider a proposal from staff and adviser NEPC to terminate its investment in the Pimco Unconstrained Bond Fund and shift that to two private equity pools managed by the same general partner: Pimco Bravo Fund III LP and Pimco Corporate Opportunities Fund II.Click here for report re: real estateClick here for report re: Pimco

Orange County Employees Retirement System is expected to receive an update today on investment manager fee structures and a quarterly investment performance analysis reports from NEPC and RVK, according to the meeting agenda.Click here for agenda

Tennessee Consolidated Retirement System's investment committee was due to discuss unspecified private equity transactions at its June 24 meeting, according to the agenda.Click here for agenda

FUNDRAISING

June 29, 2016 Bloomberg Brief Private Equity 3

FUNDRAISING

Lexington Partners is preparing to raise its fourth mid-market secondary fund, according to documents from a potential investor.

The firm is "starting" new fund Lexington Middle Market Investors IV LP two years after holding a final close on its predecessor, Tom Shingler, a vice president at investment consultant Callan Associates, told a June 22 meeting of pension fund board of Fairfield, Connecticut, according to of the meeting.draft minutes

A Lexington spokesman declined to comment on the fundraising.The prior fund, Lexington Middle Market Investors III LP, closed with $1.07 billion in

commitments, beating the firm's $750 million target, according to the Bloomberg data. About 40 percent of that capital had already been committed to investments by the final close, according to a July 7, 2014 statement from Lexington. The fund's strategy is to buy interests in growth capital, small and middle market buyout funds, according to the statement.

The 2014 fund has a 21.8 percent net internal rate of return and a 1.25 times multiple of invested capital, according to Sept. 30, 2015 data from investor Florida Retirement System. That performance puts it in the top quartile compared to peer funds, according to data compiled by Bloomberg.

Other investors in the 2014 fund include the Fairfield pensions, Maryland State Retirement System and Pension Systems, North Carolina Retirement Systems and West Yorkshire Pension Fund, according to the Bloomberg data.

New York-based Lexington, headed by Managing Partner , manages Brent Nicklasmore than $34 billion in private equity secondary and co-investment funds.

— Ainslie Chandler, Bloomberg Brief  

Brazil's Grupo BTG Pactual has spun out its global funds management business, which focuses on large-scale minority and non-control investments.

The division is now an independent asset manager known at ., GPI Capital Ltdaccording to its website. The new firm was incorporated in England and Wales on March 1, according to the U.K. Companies House regulatory filings.

BTG Pactual Global Partnership Investing, as it was formerly known, was trying to raise $3 billion for a global special opportunities fund known as GPI Fund, and it had commitments for over a third of the money from two anchor investors, Bloomberg Brief reported in May. The fund’s first investment was made as part of a consortium that financed Hutchinson Whampoa’s planned purchase of U.K. wireless company 02 from Telefonica SA.

The spinout follows the November arrest of BTG’s founder and then-Chief Executive Officer in connection with a sweeping corruption investigation in Brazil. Andre EstevesFollowing the arrest, the investment bank and asset manager started selling assets to boost liquidity. Esteves, who denied any wrongdoing, was later released and returned to the firm as a senior partner and adviser in April.

A BTG spokesman declined to comment. GPI Capital did not respond to e-mails or phone messages seeking comment.

New York and London-based GPI is led by Managing Partner and Chief Investment Officer , the former head of relationship investing at Ontario Teachers' Bill RoyanPension Plan Board. He joined BTG Pactual in 2014.

GPI partners and are listed, along with Royan, Francois-Bernard Poulin Alex Migonas "approved people" in relation to the firm's listing on the U.K.'s Financial Services Register website. Migon and , also a partner at GPI, were both previously Khai Haportfolio managers at Ontario Teachers', according to their LinkedIn pages.

GPI focuses on large-scale, long-term strategic investments, typically ranging from $100 million to $500 million, in various industries, including health care, telecommunications, industrials and financial services, according to its website. It makes significant minority non-control investments to "finance transformation initiatives in both privately-held late-stage firms and in publicly-traded companies," the website states.

— Ainslie Chandler, Bloomberg Brief

Lexington Gearing Up to Raise Fourth Mid-Market Fund

BTG's Private Equity Unit Has Spun Off as GPI Capital

Terra Firma Capital Partners, the private equity group founded by Guy Hands, is exploring buying portfolios of companies that its peers have held onto for longer than planned, according to people familiar with the matter.

The Guernsey, Channel Islands-based firm has asked advisers to find groups of companies in other buyout firms’ funds that have been held longer than the usual five-to-seven-year investment period, the people said. The move is a shift in strategy by Terra Firma, which has traditionally bought one company at a time.

Deals of this type, known as secondary direct transactions, are a relatively small part of the private equity market, given their complexity and size. Bridgepoint, a U.K.-based private equity firm, sold a group of companies worth a combined 2 billion euros ($2.2 billion) to a group backed by Harbourvest Partners in January. Offloading the investment means the initial investor can then close its pool, and return the remaining capital to backers.

Terra Firma executives are interested in secondary direct deals because, unlike traditional single company buyouts, they are typically sold at a discount and offer greater scope for operational improvements, the people said. Financing will come from the 1 billion euros the firm said it had available in February last year from Hands’ personal fortune and other investors, rather than a traditional fund, the people said.

A spokesman for Terra Firma declined to comment.

Hands, 56, this month dropped his second attempt to force Citigroup Inc. to pay about 2.5 billion pounds ($3.7 billion) in damages over Terra Firma's purchase of U.K. music group EMI Group Ltd.

  — Kiel Porter, Bloomberg News  

Terra Firma Said to Seek Other GPs' Portfolios

MORE FUNDRAISING

June 29, 2016 Bloomberg Brief Private Equity 4

MORE FUNDRAISING

Origami Capital Partners LLC held a final close on its third fund, which will invest in secondary fund stakes and trapped assets, with $371 million in commitments, according to a statement from the firm today.

Origami focuses on trapped assets that are in illiquid ownership structures and that are subject to debt, litigation or other problems. Typical investments include illiquid residual hedge fund interests, real estate and private equity fund interests and restructurings and minority interests in alternative investment management firms. It has a target investment size of $10 million to $50 million, according to its website.

Origami held a first close on the fund in March with $139 million in commitments from 57 investors, according to a regulatory filing.

The firm is run by founder and managing partner Thomas and managing partner .Elden Jeff Young

Sixpoint Partners LLC acted as placement agents on the fundraising, according to the statement.

  — Ainslie Chandler, Bloomberg Brief  

Apax Partners has secured $7.9 billion for its latest pool of capital, said people familiar with the matter.

Origami Closes Trapped Assets Fund

Apax Partners Said to Raise 7.9 Billion

The firm told investors on Friday that it had held a first close — the point at which it can begin spending the money — for Apax IX, said the people. The firm has a cap of $9 billion for the fund, the people said.

Apax IX is the first global fund that the firm’s raised since and replaced in Andrew Sillitoe Mitch Truwit Martin Halusa

December 2013 as co-chief executive officers of the firm. The pool is larger than its predecessor, Apax VIII, for which the firm raised $7.5 billion in June 2013.

A spokesman for Apax declined to comment.Apax, which has offices across the globe and significant

operations in the U.S., has eschewed the diversification drive favored by European peers including CVC Capital Partners and EQT Partners and stuck to buyout investments. However, the firm has broadened its capital sources, raising a $500 million Israel-dedicated pool for smaller deals and listing a permanent capital vehicle, Apax Global Alpha Ltd., in 2015.

This month the firm agreed to purchase Agencyport, a software provider to the property and casualty-insurance industry, according to its website.

The new fund will continue to invest in the firm’s core industries: consumer, health-care, technology and telecommunications and services businesses, the people said. Apax has raised 35 billion euros for funds through 2015 and currently owns stakes in retail brands Cole Haan and Fullbeauty, according to the company’s website.

— Kiel Porter and Sarah Syed, Bloomberg News

CLOSINGS

Cinven Ltd. has raised 7 billion euros ($7.8 billion) for its sixth fund, which will focus on investments in Europe. The London-based firm amassed the pool in four months, with more than 90 percent of previous investors participating, it said in a statement Wednesday.

Cinven’s fifth fund had attracted 5.3 billion euros in 2013, investing in 17 companies and making more than 40 acquisitions, the company said.

Latin American investors, who participated in the previous global fund for the first time, increased their contributions while investment from the Middle East decreased, the firm said. U.S., Asian and European investors made up the majority of the pool, and pension funds accounted for almost half of investors.

— Sarah Syed, Bloomberg News

Cinven Raises $7.8 Billion for Sixth Buyout Fund

Ardian held a final close on its Expansion Fund IV with 1 billion euros ($1.1 billion) in committed capital. That is twice the size of its processor, raised two years ago, the Paris-based firm said Wednesday. The fund will provide growth capital and will lead buyouts, focusing as it has in the past on France, Germany, Italy, Belgium and Austria, and will expand its scope to Spain after opening a Madrid office last year. It can invest up to 100 million euros per transaction, according to the statement. Investors come mainly from Europe and Canada, according to the statement, and include pension funds and insurers.

— John E. Morris, Bloomberg Brief

Ardian Garners $1.1 Billion for Direct Investments

TorQuest Partners reached the hard cap for its fourth middle-market buyout fund, obtaining C$925 million ($711 million) in commitments. That exceeded its C$750 million target, the Toronto-based firm said in a statement Wednesday. TorQuest manages more than C$2 billion in equity capital.

— John E. Morris, Bloomberg Brief

Broadwell Capital Ltd. has raised $1 billion for Broadwell Tactical Opportunities Fund, which will invest across sectors and asset classes, focusing on "complex and illiquid" opportunities, the Guernsey-based firm said in a June 28 statement. Atlantic-

acted as placement Pacific Capital agent.

— John E. Morris, Bloomberg Brief  

TorQuest Fourth Fund Hits $711 Million Hard Cap

Broadwell Collects $1B for Opportunistic Fund

Q&A

June 29, 2016 Bloomberg Brief Private Equity 5

Q&A

Strong Dollar Draws Investors to U.S. Funds; Asia Pensions Like Real Estate, Says Ng

Gains in the U.S. dollar have attracted overseas

investors to funds holding assets in the U.S., says

, chief investment officer at Tim Ng Clearbrook

. Meanwhile, real estate funds Global Advisors

are viewed as a shelter by many Asian investors

from equity volatility. Clearbrook advises

investors on investing in private equity, hedge

funds and real. Ng spoke with Bloomberg Brief's

Aleksandrs Rozens before the U.K. vote to exit

the EU. The second question and answer below

were added after the vote. The firm sent a memo

to clients June 24 saying that the vote did not

fundamentally alter its recommendations. Ng's

comments have been edited and condensed.

Q: How does a strong U.S. dollar impact your fundraising and how much of a role does it play for investors putting money to work in funds?A: It won't impact the domestic investor as much. But, what it does impact is the offshore investor. Any interest rate increase will bring fund flows because of the greater competitive interest rates. You can invest in U.S.-based assets that have another tailwind which is an appreciating dollar versus your local currency. You can now factor that in as a portion of your return vis-a-vis the underlying assets as well.

Q: Are you seeing a drop in interest in funds that are putting money to work in emerging market economies that have seen a drop in the value of local currencies because of the downturn in commodities?A: It has affected it the past, but the thought is with Brexit that the dollar has appreciated a bit but because it is anticipated that the Fed will not move up interest rates in the near future and there is the possibility of a decrease in rates in the U.S., the U.S. dollar should stabilize and that would bode better for potential investments in emerging markets and commodities.

Q: What are the different strategies being pitched by fund managers

raising money? You have the large buyout funds, but A:

what is interesting to us are funds that are

targeting smaller acquisitions, the buy-and-build model. They are looking at companies with $250 million market caps, buying them at more reasonable multiples versus Ebitda and being able to vertically integrate a company and actually build it piece by piece and then getting a higher multiple five years later. They find it much more rewarding doing that.

You are also seeing a great deal of interest in the secondary [partnership stakes] market. You have a number of funds out there that folks are trying to monetize from vintages 2005 and 2006. It is buyouts and VC as well.

helped Q: Has a tougher IPO marketstir up secondary buyout activity?

A: That's contributing to it. With the regulations in banking it is much more

difficult to get interim financing. The cost of financing is going up as well. That's

also causing the secondary [buyout] market to be more robust than it has been. A lot of the deals, particularly those involving bank sponsors, have a limit in regard to the amount of leverage as a multiple of Ebitda that they can lend against. It is limiting the amount of leverage you can use.

Q: Are real estate funds being traded in the secondary market?A: Not as much. There is a tremendous

appetite for real estate from big institutions. The interesting dynamic is

coming from Asia. The Asian pension funds have effectively said the volatility in

equity markets is really bad so they aresaying "Where can I get some yield, but I

don't have the underlying volatility? And oh, by the way, it is a tangible asset." A

number of these institutions are moving toreal estate even though cap rates in someplaces may be at 3 percent or 4 percent.

Q: Has the large amount of moneycoming into the PE fund industry impacted fees?A: Obviously the premier managers always will get pretty good fees. If you have a volume investment to be made — $100 million, $200 million, $500 million — you can negotiate fees at all levels. The reason is it is always good for a PE fund to say I've been in the market for six months and I have gotten it filled and its not sitting out there for 18 months. Also, what's very, very important is that in a low-interest rate, low-return environment every basis point you save on fees goes right down to the bottom line. So our investors today are more fee sensitive than they have ever been before.

Q: Are more investors looking to put money to work in distressed assets? Have commodities attracted any interest?A: We are seeing it not so much in the metals side. We are seeing it in the energy side. We are big fans of midstream because they are involved with transportation and storage of oil. They are not E&P guys and should be less sensitive to changes in oil prices. One of the big growth areas we are seeing folks trying to get into is clean energy — natural gas power plants, wind farms.

58Age: B.A. Economics, Stony Brook University; Masters in Education:

Finance with honors, Long Island UniversityMerrill Lynch, Smith Barney, Oppenheimer, Career history:

Structured Investments Group, Clearbrook Global AdvisorsSon Scott, 25; daughter Michele, 29; wife DeborahFamily:

San PietroFavorite restaurant:Fitness trainingFavorite hobby:

Pillars of the Earth by Ken FollettFavorite book: The Metropolitan Museum of ArtFavorite museum:

Sports broadcasting  If you were not in finance you would chose a career in:

KOCH BROTHERS

June 29, 2016 Bloomberg Brief Private Equity 6

KOCH BROTHERS

Koch Brothers Fill Wall Street's Void in Private Equity LendingBY DEVIN BANERJEE AND SRIDHAR NATARAJAN, BLOOMBERG NEWS

Some big corporate buyouts are quietly finding two unusual backers: and CharlesDavid Koch.

When credit markets froze at the end of last year, private equity firm

Vista Equity Partnersturned to a unit of the Koch empire to help finance its $6.5 billion buyout of software

provider Solera Holdings. Koch Equity kicked in $800 million in Development

March. Two months later, Koch Equity provided $750 million to enable Apollo

to complete the Global Management$12.3 billion acquisition of home-security company ADT.

For the billionaire Kochs, who made their fortune in the energy business, the deals mark a sharp expansion in financing private equity deals. Modeling itself after 's Warren Buffett Berkshire

Koch Equity, or KED, has the Hathaway,advantage of access to capital from parent 's Koch Industries Inc.considerable balance sheet.

The timing is no accident. Direct lenders like Koch are stepping into a void left by regulated banks, whose lending has been hampered by tougher capital requirements since the financial crisis.

“We saw that Buffett was deploying capital in ways we thought were appealing and there weren't a lot of folks doing it,” said KED's Matt Flamini,president, in a rare interview. “As regulations have evolved, affecting the credit markets, our willingness and capability to invest capital in this manner have grown. We identified what we believed to be a market need.”

The Kochs, known these days for their

conservative political activism, aren't new to private equity. They first formed the unit in 2002. Its mission then was to find and finance tuck-in acquisitions that fit companies owned by Koch Industries, today the second-biggest closely held company in the U.S.

In more recent years, Flamini said, KED has accelerated its activity in financing buyouts and has also started to partner with other investors to buy companies' equity outright. The unit doesn't deploy money from investors, meaning that unlike buyout firms it doesn't face pressure to show returns in a specified time.

It also has shareholders who “want to reinvest 90 percent of the earnings back into the business,” Flamini said, referring in part to Charles, 80, and David, 76. Each brother has a net worth of $53.4 billion, according to the Bloomberg Billionaires Index, ranking them fifth-wealthiest globally.

“We don't run three-year or five-year models, we run 20-year models” Flamini, 51, said of the transactions in which KED acquires a new business. “Our expectation is that when we're buying a company, we're going to own it forever.”

KED's financing side has gotten busier as private equity firms seek alternatives to banks to pay for their deals. Alternate lenders like KED don't come cheap. Their terms are typically more expensive than traditional bank loans.

“When the market is sort of frozen, our capital is very valuable,” said Andre

CEO of Canada's Bourbonnais, Public Sector Pension Investment Board,

which contributed $1 billion to the ADT buyout.

But some buyout firms have stuck with them, in part because they provide the option to lock in borrowing costs even if credit markets worsen, a protection that

banks typically don't offer. As a result of their popularity, funds that buy private debt raised $85 billion last year, the most since 2008, according to research from Preqin.

“We were able to, in the case of many transactions, lower the prices that we paid and then be very creative about arranging financing,” Josh Harris,Apollo's billionaire co-founder, said at a conference last month. With the ADT deal, Apollo was willing to accept KED's “quite expensive” financing, he said, because it allowed the deal to be completed.

KED, which has about 20 dealmakers, typically structures its financing by buying preferred equity positions, which are senior to holders of common equity and junior to debt investors. The group's “sweet spot” is to invest $300 million to $600 million, Flamini said, though it will put significantly more behind a transaction if Koch can reap strategic benefits from the investment, including the potential of later owning the business.

“If we look at the business and see that even with just a preferred equity investment we could learn from this business, or we could pick up some capabilities, or maybe they could learn something from us, then we're willing to get to the roughly $1 billion range,” he said.

KED's brand in the market for buyout financing has grown with its deals this year, Flamini said, adding that the group now gets calls from multiple players on the same deal.

“We're looking at deals of similar size to Solera and ADT,” said Flamini. “Whether we get them across the finish line remains to be seen.”

— With assistance from Michelle F. Davis

BREXIT FALLOUT

Photo: Bloomberg/ Amanda Gordon

David Koch

June 29, 2016 Bloomberg Brief Private Equity 7

BREXIT FALLOUTEQT Puts U.K. Plans on Hold After BrexitBY SARAH SYED, BLOOMBERG NEWS

The Nordic region’s largest buyout fund is scrapping plans to expand in the U.K. following the country’s decision to leave the European Union.

EQT Partners AB has abandoned plans to add an office focused on investing in equities to its credit platform in the U.K., Managing Partner Thomas

said in an interview at the von Kochfirm's London office Tuesday.

EQT is pulling back on its plans in the U.K. following the country’s decision to leave the EU on Thursday, which threw stock and currency markets into turmoil. Nervous investors and unpredictable markets will make U.K.-focused companies less attractive for now, von Koch said.

“Following Brexit, we have decided to put equity expansion in U.K. on hold for the moment, and continue our focus on

the Nordics and Germany,” he said. “We believe in collaboration, not isolation.”

The company, which currently doesn’t have any equity investments in the country, would only consider U.K. companies that generate most of their sales abroad, he said. If the U.K. strikes a Norway-style deal with the EU, where it retains access to the single market, the buyout firm could revisit its plans.

Given the slump in the pound against the euro since the vote, there may be more opportunities for euro-denominated funds to invest, von Koch said. It’s a sentiment echoed by other buyout funds in the region.

“Uncertainty in the markets favors us, and the current currency volatility has been extraordinary,” said , Carl Harringmanaging partner of a euro-denominated fund, . The vote “has HIG Capital LLCthrown up a number of opportunities that

may look more attractive now, especially where others might struggle to commit in light of the uncertainty.”

EQT has raised about 30 billion euros ($33.3 billion) in capital for more than 20 funds and has invested almost 17 billion euros, according to its website. In August, the company closed its EQT VII fund after raising 6.75 billion euros. Last month, the company raised 566 million euros to invest in European technology companies.

The uncertainty around Brexit may shift venture capital to "other major hubs like Germany and Tel Aviv,” said Mark Tluszcz of Mangrove Capital, a London venture capital firm.

Click here full story on web

VENTURE FALLOUT

COMINGS & GOINGS

Maurizio Bottinelli, chief executive officer of , has left the the Clessidra SGRItalian private equity firm, according to an e-mailed statement from the company Tuesday. The firm said he "will pursue new professional opportunities."

Bottinelli joined the Milan-based firm in 2007 and was named CEO this year, according to Clessidra's website. He previously worked at Apax Partners and Procter & Gamble.

Clessidra named Vice Chairman Piero CEO and appointed Alonzo Mario Fera

to fill Bottinelli's seat on the board, the firm said.

The departure follows the death in January of Clessidra's founder Claudio

at age 60. Clessidra's board Spositosaid in March that talks had broken off with the Sposito family about purchasing its controlling stake in the firm. Clessidra's board said in a statement at the time that it hoped "a solution on the ownership structure and corporate government can be reached as soon as possible."

— John E. Morris, Bloomberg Brief

Clessidra CEO Departs

Pavilion Financial Corp. agreed June 28 to buy , the Altius Holdings Ltd.parent of Altius Associates, the private-markets advisory and separate accounts manager. Altius, which has offices in London, Singapore and Richmond, Virginia, will merge with Pavillion's alternative assets advisory unit LP Capital Advisors, which is based in El Dorado Hills, California, near Sacramento. The combined business, to be known as Pavilion Alternatives Group, will have about 70 professionals, according to a from Winnepeg, statementManitoba-based Pavilion.

All senior management from the firms will remain, it said. Altius manages and advises on more than $30 billion of capital, according to its website. LP Capital was formed in 2004 and acquired by Pavillion in 2014, according to the statement.

— John E. Morris, Bloomberg Brief

Pavillion Buys Altius to Merge It With LP Capital

Warburg Pincus Hires Ex-GEExec Mark Begor

Warburg Pincus hired former General Electric

executive Co. Mark Begorfor industrial and business-service deals. Begor, 58, will be a managing director at the New York-based private equity firm, Warburg Pincus said in an e-mailed statement Monday. He’ll help grow

companies in its portfolio, make their operations more efficient and evaluate new deal opportunities, the firm said. At GE, Begor was most recently chief executive officer of the company’s energy management business. He previously was CEO of GE Capital’s real estate unit and had other roles in GE’s finance, NBCUniversal Media and investor-relations units after joining the company in 1980.

— Devin Banerjee and Kiel Porter, Bloomberg

News

AROUND THE WORLD IN SEVEN DAYS  PRIVATE EQUITY DEAL NEWS

Photo: Warburg Pincus

Mark Begor

June 29, 2016 Bloomberg Brief Private Equity 8

AROUND THE WORLD IN SEVEN DAYS  PRIVATE EQUITY DEAL NEWS

Vestar Sells Soaps; Blackstone Merges Health-Care IT Company With McKesson Unit 

WHERE THE MONEY GOES COMPILED BY ERIN ZLOMEK, BLOOMBERG NEWS

June 29, 2016 Bloomberg Brief Private Equity 9

WHERE THE MONEY GOES COMPILED BY ERIN ZLOMEK, BLOOMBERG NEWS

Significant venture capital investments of June 10-24. Sources: Bloomberg News except where noted in parentheses.

New Enterprise Associates led a $44 million series B round in

, a Annexon Biosciencescompany that develops

treatments for neurodegenerative disorders. 

Iconiq Capital led a $55 million series D round for prototyping tool . InVision

and Accel Partners also participated. FirstMark Capital

(Source: TechCrunch)  

Northern Light Venture Capital and led a $100 million New Horizon Capital

series D round for , a Beibei.commaternity and infant products company. Existing investors and Banyan Capital

also participated. Capital Today(Source: DealStreet Asia)  

  Beijing-based investment firm led a $60 IDG Capitalmillion round in blockchain-based payments app

. , Circle Breyer Capital General , co-Catalyst Partners SilverLake

founder and former IBM Glenn HutchinsCEO also participated Sam Palmisano(Source: Coin Desk)  

Sectoral Asset Management led a $60 million round in U.K.-based antifungal drug discovery and

development company F2G Ltd. Novo A, , /S Aisling Capital Brace Pharma

and existing investors Capital Advent , , Life Sciences Novartis Venture Fund

and Sunstone Capital Merifin Capitalalso participated.

Horizons Ventures, , , Lenovo Tencent

, Banyan Capital and Comcast Ventures

GQY invested $50 million in a series B funding round for Meta, an augmented reality technology company.  

Providence Equity Partners invested $130 million in SaaS company

, Bloomberg LogicMonitorreported. The company

told Reuters that it sees using the proceeds to expand in Asia and that the private funding round will likely be its last before filing to go public.

China Renaissance Partners participated in a $235 million series D round for , a China-Fenqile

based e-commerce company focused on electronics.  

LAUNCHES AND COMMITMENTS

June 29, 2016 Bloomberg Brief Private Equity 10

Recently Launched/Premarketing

FUND STRATEGY REGION CURRENCYTARGET

(ORIGINAL CURRENCY)

DFJ Growth 2016 LP Venture North America USD 500

Female Founders Fund II LP Venture North America USD 30

Ironwood Mezzanine Fund IV LP Debt North America USD 400

Black Bay Energy Fund I Growth North America USD 200

Strategic Private Equity Fund V LP Fund of Funds Any USD —

Brookfield Infrastructure Debt Fund I LP Real Assets Any USD —

GS Vintage VII LP Secondary Any USD 5,000

Iconiq Strategic Partners III LP Venture North America USD —

Endeavor Catalyst II LP Coinvestment Any USD 100

UpWest Labs Fund III LP Venture Any USD 20

YLV III LP Venture Any USD —

Alchemist Nonlinear Partners I LP Venture North America USD 50

Vogo Fund III Buyout Any KRW 600,000Source: Bloomberg Private EquityCompiled from SEC filings, Bloomberg stories and other press reports. Reports from sources other than Bloomberg have not been verified. All figures in millions.

Recent Commitments

LIMITED PARTNER FUND REGION STRATEGY CURRENCYCOMMITMENT

(ORIGINAL CURRENCY)

TARGET (ORIGINAL CURRENCY)

Alaska Retirement Management Board NB Secondary Opportunities Fund IV LP Any Secondary USD 50 na

Korea Teachers Pension Brookfield Infrastructure Fund III LP Any Real Assets USD na 12,500

Public Officials Benefit Association Brookfield Infrastructure Fund III LP Any Real Assets USD na 12,500

Employees' Retirement System of Rhode Island GEM Realty Fund VI LP North America Real Estate USD na 1,000

Town of Fairfield Connecticut Pension Trust Funds Lexington Middle Market Investors IV LP Any Secondary USD na naSource: Bloomberg Private EquityCompiled from SEC filings, Bloomberg stories and other press reports. Reports from sources other than Bloomberg have not been verified. All figures in millions.

LAUNCHES AND COMMITMENTS

CLOSES

June 29, 2016 Bloomberg Brief Private Equity 11

Recently Closed

FUND STRATEGY REGION CURRENCYTARGET

(ORIGINAL CURRENCY)

CLOSED IN 2016 ($)

TOTAL RAISED TO

DATE ($)

Alliance Fund II LP Growth North America USD 350 197 197

Apax IX LP Buyout Any USD 7,500 7,900 7,900

Arbor Investments IV LP Buyout North America USD 750 750 750

Atalaya Asset Income Fund III LP Debt North America USD 525 189 189

Aurora Lancy Sino-Korea Consumer Upgrade Internet Fund LP Growth Any CNY 800 — 16

Bee Partners II LP Venture North America USD 25 30 30

Benson Elliot Real Estate Partners IV LP Real Estate Any EUR 600 597 690

Blackstone Core Equity Partners LP Buyout North America USD 5,000 1,575 1,575

CFH Heritage LP Real Estate North America USD 11 2 2

Clearlake Opportunities Partners LP Debt North America USD 500 542 542

Gramercy Distressed Opportunity Fund III LP Debt Any USD — 472 471

Jiawo Capital Smart Technology Fund I Venture Asia Pacific Emerging CNY 1,000 — 75

Lightspeed China Partners III LP Venture Asia Pacific Emerging USD 240 — 260

Lightspeed China RMB Fund Venture Asia Pacific Emerging CNY 500 75 75

Lime Rock Partners VII LP Growth North America USD — 132 434

MNG Newport Beach Investors LP Real Estate North America USD 2 — —

MPE Partners II LP Buyout North America USD 225 140 140

Partech Growth Fund Growth Any EUR 300 202 442

Pipeline Capital Partners I LP Venture North America USD — 7 14

Polaris Mo6 LP Real Estate North America USD 2 2 2

Sixth Sense Ventures Fund I Venture Asia Pacific Emerging USD 40 — —

TA Realty Associates XI LP Real Estate North America USD 1,250 613 613

Verge II.5 LP Venture North America USD 7 7 7

Viridis Fund I Venture North America USD — — —

Welsh Carson Anderson & Stowe XII LP Buyout North America USD 3,000 330 3,330

Young Founders Fund Venture North America CAD — — —

z9 Clubhouse Fund I LP Venture North America USD 25 1 1Source: Bloomberg Private EquityCompiled from SEC filings, Bloomberg stories and other press reports. Reports from sources other than Bloomberg have not been verified. All figures in millions.

CLOSES

LISTED PRIVATE EQUITY

June 29, 2016 Bloomberg Brief Private Equity 12

LISTED PRIVATE EQUITYShares of British private equity fund managers and were off 9.1 percent and 13.9 percent, 3i Group Plc Electra Private Equity Plcrespectively, in the five trading days ended June 28 in the wake of the Brexit vote in the U.K. The FTSE 100 index was off much less, falling 1.7 percent over the same span. The biggest losers among U.S. private equity firms were , which was down Ares Management10.8 percent over the past week, and , off 8.2 percent. The S&P 500 fell 2.5 percent over the same period.KKR & Co.

— John E. Morris, Bloomberg Brief

CALENDAR

Source: Bloomberg. Prices and market caps in local currencies. Updated after the close of the market June 28.

June 29, 2016 Bloomberg Brief Private Equity 13

Upcoming Limited Partner Meetings

LIMITED PARTNER DATE NOTES

Buckinghamshire Pension Fund 6/29 Pension Fund Committee

Oklahoma State Regents for Higher Education 6/29 Special meeting

Orange County (Calif.) Employees Retirement System 6/29 Investment committee meeting; see From the Minutes

San Antonio Fire and Police Pension Fund Board 6/29 Board meeting

Policemen's Annuity and Benefit Fund of Chicago 6/30 Board meeting

Seattle City Employees Retirement System 6/30 Investment committee meeting; diversifying strategies introduction

Town of Greenwich (Connecticut) Retirement Board 6/30

Tucson Supplemental Retirement System Board 6/30

Wiltshire County (U.K.) Council Pension Fund 6/30 Pension fund committee

Detroit General Retirement System 7/6 Board meeting

Municipal Fire & Police Retirement System of Iowa 7/7 Discussion of unspecified private equity recommendation

San Diego City Employees Retirement System 7/7 Investment committee meeting

Teachers Retirement System of Louisiana 7/7

San Diego City Employees Retirement System 7/8 Board meeting

San Joaquin County Employees Retirement Association 7/10 Regular meetingSource: Bloomberg BriefCompiled from limited partners' websites and press releases.

Bloomberg Brief: Private Equity

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