Dutch pension provider PGGM is among investors that have made a private equity investment using an innovative way to buy stakes in existing funds from limited partners that wanted to exit.
Private equity firm Palamon Capital Partners mandated Credit Suisse Asset Management to organise a “whole-fund liquidity option” for two Palamon funds, which enabled limited investors already in the funds to sell their stakes to investors, including PGGM, at attractive prices, while existing fund investors who remained in the fund are unaffected.
The investors buying the stakes also include Adams Street Partners, Goldman Sachs AIMS Private Equity Group, Morgan Stanley Alternative Investment Partners, and the Rothschild Merchant Banking Group.
Palamon mandated Credit Suisse Asset Management to organise the whole-fund liquidity option for limited partners interested in selling their interests in Palamon European Equity LP and Palamon European Equity II LP.
Following an auction, an offer book was built for the entirety of the interests in both funds, which resulted in investors who elected to sell being able to do so through an easy, efficient and smooth process at highly attractive pricing, say Palamon and Credit Suisse, which reflected the structure of the process and the quality of the assets in each of the portfolios.
Over one quarter of the aggregate net asset value was exchanged and investors who did not sell are still in the funds, which function as normal.
“They [Palamon] deserve credit for their forward thinking approach to providing liquidity to their investors while securing capital from a blue-chip list of new investment partners,” says Jonathan Abecassis, from the secondary advisory team at Credit Suisse.
The investor group has also committed capital to a new vehicle investing alongside Palamon Auxiliary Partnership, which has made investments recently in the UK legal services provider, Simplify Group, and the Italian artisanal leather accessories brand, Il Bisonte.
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