Whale watching: Mid-cap GPs engage large-cap LPs

Recent appointments by Everstone Group and Legend Capital appear to have little in common: one firm targets control deals in India and Southeast Asia, the other concentrates on China tech deals; one recruit is based in the US, the other is in Hong Kong. Yet both underline how the more complex GP-LP relationship is permeating into the middle market.

Suneel Kaji, who was most recently part of the private markets team at University of Texas Investment Management (UTIMCO), has joined Everstone as a managing director in New York. Part of his role involves sourcing direct investments in US businesses that have a back-end in Asia and helping portfolio companies from India and Southeast Asia crack North America. Kaji is expected to spend the rest of his time developing relationships with large institutional investors.

The latter function involves dealing with LPs that have exposure across multiple parts of an Everstone product portfolio that now encompasses private equity, industrial and logistics facilities, venture capital, and an Indian non-banking finance company (NBFC). Large LPs might also be seeking co-investment or even their own customized solutions. In 2017, for example, Everstone formed a logistics joint venture with Canada Pension Plan Investment Board (CPPIB).  

These relationships involve broader negotiations that don’t necessarily follow the arc of an individual fundraising process. It is a world Kaji knows well. UTIMCO is said to have backed several Everstone products, while Kaji also participated in the endowment’s global middle-market co-investment program.

Piau-Voon Wang, who took Adams Street Partners into Asia and latterly served as co-CIO of Chinese wealth manager Noah Holdings, has been installed as a managing director and COO at Legend. Once again, there is a legacy LP angle. Wang invested in Legend’s US dollar-denominated funds while at Adams Street and in its renminbi vehicles during a stint with CDB Capital – the investment arm of China Development Bank – after he departed Noah.

Wang’s brief is to support the development of Legend’s management team, the expansion of its cross-border investments, and the further internationalization of its LP base. The appointment coincides not only with the firm raising its latest US dollar technology and healthcare funds, but also with the construction of an investment platform designed for large-ticket LPs.

Legend is looking to raise around $800 million for the platform, with the minimum check size set at $100 million. Participants will get access to the firm’s funds, to co-investments that arise from these vehicles, and to a pipeline of direct deals – separate from the funds – that are sourced through the Legend network. Invitations to advisory council meetings come as part of the package.

Neither Everstone nor Legend qualifies as large-cap; their assets under management are around $5 billion and $7 billion, respectively. But they have recognized that engagement with larger LPs requires more than just a plain vanilla investor relations proposition and they have recruited individuals who are known in the institutional investor community to help coordinate these efforts.

For smaller managers in Asia that do not have a host of strategies and an army of IR professionals spread across the globe, fundraising was traditionally an intermittent pursuit: they were on the road constantly during the process itself and, outside of annual general meetings and site visits, there would be the odd catch-up meeting over the three or four years. Then the cycle would start again.

But the landscape has shifted. Due to more frequent information exchange, the rise of co-investment, and a general appreciation that LP relationships may wither and die if not regularly watered, the investor relations function has become demanding and to a certain extent unstinting. On top of all that, the biggest backers require special treatment. Managers looking to target these LPs – and retain their favor – must put in place the right products and the right people.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• South Asia
• People
• Fundraising
• GPs
• Everstone Capital
• Legend Capital
• China
• India
• Investor relations