September liquidity events related to portfolio companies in which PIF invests through its private equity holdings.
Potential benefits of secondaries
A key potential benefit of a private equity strategy focused on secondaries is its potential to provide an enhanced liquidity profile compared to a primary-focused strategy. Because secondary investors enter after the investment period is complete, the underlying portfolio is much closer to the point of realization. This typically allows investors to mitigate the J-curve and shorten the duration of their investment.
Pomona enhanced liquidity
Pomona typically purchases seasoned funds well into their 10-year life cycle whose commitments are 70–90% called. Pomona manages the Pomona Investment Fund (PIF) portfolio to receive cash distributions as the more mature assets are realized, while also adding younger assets to the portfolio that are expected to enter the growth phase. This maturity profile has led to an enhanced liquidity profile and, in our view, puts PIF in a strong position to comfortably meet its outstanding commitments and to nimbly respond to new investment opportunities.
27% Average annual portfolio liquidity1 (as % of NAV)
8% Average annual distribution2,3 to shareholders (as % of NAV)
Notable liquidity events
Below is a list of articles that discuss companies that were recently liquidated from the fund. Please refer to the recent headlines and corresponding links below for more information on these liquidity events.
Arthur J. Gallagher completes $13.5 Billion acquisition of AssuredPartners
Arthur J. Gallagher & Co. closed the previously announced acquisition of U.S. insurance broker AssuredPartners, further expanding its retail middle-market property/casualty and employee benefits focus across the U.S.
Gallagher announced in December that it had agreed to acquire Orlando, Florida-based AssuredPartners for $13.45 billion in cash. AssuredPartners’ 10,900 employees will become Gallagher employees. Gallagher said the deal’s net consideration is about $12.45 billion after a deferred tax asset.
AssuredPartners’ private-equity ownership GTCR and Apax Partners were reportedly looking for partners for a full or partial sale of the brokerage for several months. Chicago’s GTCR said Gallagher’s buy of AssuredPartners is the “largest sale of a U.S. insurance broker to a strategic acquirer in the history of the industry.”
H.I.G. Capital, a global alternative investment firm with $70 billion of capital under management, announced that its portfolio company, Iron Bow Technologies, has completed the sale of its Telehealth division, SoldierPoint Digital Health, LLC, to GovCIO, a portfolio company of Welsh, Carson, Anderson & Stowe.
Since acquiring Iron Bow, H.I.G. has worked with the Company’s management team to more than double the earnings of the Company’s Telehealth division, which was initially a hardware-based telehealth solutions program with the Department of Veterans Affairs, but developed into a services-led platform anchored in advanced application development and digital care innovation.
Jonathan Fox, Managing Director at H.I.G., said: “SoldierPoint’s success is a testament to the strength of the management team and H.I.G.’s ability to support long-term strategic growth. Through our partnership with Iron Bow, we were able to generate a superior outcome for the Company and its stakeholders. We wish SoldierPoint continued success in its next phase of growth.”
Warburg Pincus and Carlyle to sell NEOGOV to EQT and CPP Investments
Funds managed by Warburg Pincus LLC, a global growth investor, and global investment firm Carlyle announced the signing of a definitive agreement to sell NEOGOV,a provider of HR and compliance software for U.S. public sector agencies, to EQT X fund and Canada Pension Plan Investment Board.
Founded in 2000 and headquartered in El Segundo, California, NEOGOV delivers purpose-built human capital management and public safety solutions to nearly 10,000 public sector organizations across North America. NEOGOV’s cloud-native suite supports the full employee lifecycle–from recruitment and onboarding to performance management and compliance management–while helping agencies stay compliant with local policies and regulatory frameworks.
New investors take £500m minority stake in forecourt operator - operates 1,200 sites nationwide
Private equity firm CD&R has sold a minority stake in the UK’s largest independent forecourt operator to a group of institutional investors.
Motor Fuel Group (MFG), which operates 1,200 sites across the country, now has the backing of Apollo Global Management alongside several of CD&R’s existing limited partners in a deal worth £500m. A representative of Apollo is set to join MFG’s board of directors, though the company’s governance structure is not due to change.
William Bannister, chief executive of MFG, added: “Under CD&R’s ownership, MFG has become a British entrepreneurial success story, investing in jobs, critical infrastructure, and the communities we serve. Our commitment remains firmly focused on delivering the highest quality customer experience, whether through upgrading our convenience retail, enhancing our food service, and vehicle valeting or making significant investments in EV charging to support the UK government’s energy transition.”
GTCR to Acquire FMG Suite from Aurora Capital Partners
GTCR, a private equity firm, announced that it has signed a definitive agreement to acquire FMG Suite, a provider of advisor-led marketing automation software used by financial advisors and insurance professionals, from Aurora Capital Partners.
Founded in 2011, FMG provides marketing automation solutions to wealth advisory and insurance professionals, helping advisors and agents drive organic growth through omnichannel marketing solutions that maximize efficiency and ensure compliance. The Company’s purpose-built platform, robust content library and integrated compliance workflows create a mission critical “one stop shop” for advisors seeking enhanced client engagement. FMG currently serves over 50,000 financial professionals and, through its Agency Revolution brand, over 3,500 property and casualty insurance agencies.
Leveraging FMG’s history of customer-centric product innovation, under GTCR’s ownership the Company will continue to build out its product suite and technology capabilities to meet the evolving needs of its client base and expand its market reach. FMG represents the latest partnership in GTCR’s long history of investing in wealth, marketing, and insurance services and technology, including current investments in AssetMark, AssuredPartners, CAPTRUST, Foundation Source, Simpli.fi, and Winged Keel.
Risk of investing Discussed below are the investments generally made by Investment Funds and the principal risks that the Adviser and the Fund believe are associated with those investments and with direct investments in operating companies. These risks will, in turn, have an effect on the Fund. In response to adverse market, economic or political conditions, the Fund may invest in investment grade fixed income securities, money market instruments and affiliated or unaffiliated money market funds or may hold cash or cash equivalents for liquidity or defensive purposes, pending investment in longer-term opportunities. In addition, the Fund may also make these types of investments pending the investment of assets in Investment Funds and Co-Investment Opportunities or to maintain the liquidity necessary to effect repurchases of Shares. When the Fund takes a defensive position or otherwise makes these types of investments, it may not achieve its investment objective. The value of the Fund’s total net assets is expected to fluctuate in response to fluctuations in the value of the Investment Funds, direct investments and other assets in which the Fund invests. An investment in the Fund involves a high degree of risk, including the risk that the Shareholder’s entire investment may be lost. The Fund’s performance depends upon the Adviser’s selection of Investment Funds and direct investments in operating companies, the allocation of offering proceeds thereto, and the performance of the Investment Funds, direct investments, and other assets. The Investment Funds’ investment activities and investments in operating companies involve the risks associated with private equity investments generally. Risks include adverse changes in national or international economic conditions, adverse local market conditions, the financial conditions of portfolio companies, changes in the availability or terms of financing, changes in interest rates, exchange rates, corporate tax rates and other operating expenses, environmental laws and regulations, and other governmental rules and fiscal policies, energy prices, changes in the relative popularity of certain industries or the availability of purchasers to acquire companies, and dependence on cash flow, as well as acts of God, uninsurable losses, war, terrorism, earthquakes, hurricanes or floods and other factors which are beyond the control of the Fund or the Investment Funds. Unexpected volatility or lack of liquidity, such as the general market conditions that prevailed in 2008, could impair the Fund’s performance and result in its suffering losses. The value of the Fund’s total net assets is expected to fluctuate. To the extent that the Fund’s portfolio is concentrated in securities of a single issuer or issuers in a single sector, the investment risk may be increased. The Fund’s or an Investment Fund’s use of leverage is likely to cause the Fund’s average net assets to appreciate or depreciate at a greater rate than if leverage were not used. The Fund is a non-diversified, closed-end management investment company with limited performance history that a Shareholder can use to evaluate the Fund’s investment performance. The Fund may be unable to raise substantial capital, which could result in the Fund being unable to structure its investment portfolio as anticipated, and the returns achieved on these investments may be reduced as a result of allocating all of the Fund’s expenses over a smaller asset base. The initial operating expenses for a new fund, including start-up costs, which may be significant, may be higher than the expenses of an established fund. The Investment Funds may, in some cases, be newly organized with limited operating histories upon which to evaluate their performance. As such, the ability of the Adviser to evaluate past performance or to validate the investment strategies of such Investment Funds will be limited. In addition, the Adviser has not previously managed the assets of a closed-end registered investment company. Closed-End Fund; Liquidity Risks. The Fund is a non-diversified closed-end management investment company designed principally for long-term investors and is not intended to be a trading vehicle. An investor should not invest in the Fund if the investor needs a liquid investment. Closed-end funds differ from open-end management investment companies (commonly known as mutual funds) in that investors in a closed-end fund do not have the right to redeem their shares on a daily basis at a price based on net asset value. |