Exclusive: Bonaccord Capital returns to market to raise $1.25B GP stakes fund

Bonaccord Capital Partners, which closed a $740 million fund last summer to buy minority stakes in private equity firms, is already back in the market to raise around $1.25 billion for its second fund dedicated to the strategy, according to a person familiar with the matter.

The asset manager’s fast return to the fundraising trail highlights the bullish market for targeting so-called GP stakes as investors seek alternative ways of generating returns from high-performing managers of private funds.

New York-based Bonaccord has already invested $250 million from the new fund to complement two deals backed by the firm’s first fund, the person said.

“The firm is the first of the new crop of middle-market-focused GP stakes managers to launch its second fund,” said PitchBook private equity analyst Wylie Fernyhough. “This is a significant feat given how difficult the space is to navigate, as Stonyrock Partners’ recent shuttering illustrates.”

Bonaccord declined to comment.

Founded in 2017, Bonaccord buys minority stakes in mid-sized private fund managers. It typically invests equity checks ranging from $50 million to $300 million. To date, the firm has invested $1.5 billion in GP stakes, including capital raised through co-investment vehicles.

Mid-market GP stakes appears to be the most compelling area for investors, as the top end of the GP stakes market is flush with dry powder, Fernyhough noted.

Bonaccord has joined a fundraising market that has become increasingly crowded as demand for minority investments in private capital firms heats up. Capital raised for strategies targeting minority investments in private asset managers reached around $7.2 billion last year, according to PitchBook data.
 

 

More recently, Goldman Sachs’ Petershill unit announced the closing of a $5 billion new fund focusing on GP-stakes strategy, while four managers—RidgeLake Partners, Blue Owl Capital, Hunter Point Capital and Investcorp—are also planning to raise new GP stakes funds, targeting a combined $14 billion.

Blackstone last year wrapped up its second fund investing in GP stakes, raising $5.6 billion.

Hunter Point Capital, the new investing venture formed by GSO Capital’s co-founder Bennett Goodman, is reportedly raising a $2.5 billion fund that aims to buy minority interests in private capital firms.

Bonaccord closed its first fund, Bonaccord Capital Partners I, last August, collecting $740 million in capital commitments.

Fund I is fully deployed across nine private fund managers targeting strategies including private equity, private debt, real estate and real assets. The firm’s latest investment was in Florida-based PE shop Trivest Partners, which is known for backing family- and founder-owned businesses.

Bonaccord also bought minority stakes in European private debt manager Park Square Capital, US middle-market lender Monroe Capital, US PE shop MSouth Equity Partners, real estate investment firm Spear Street Capital and specialist aerospace investor AE Industrial Partners, according to PitchBook data.

Bonaccord, founded and led by former Guggenheim executives Ajay Chitkara, Farhad Dehesh and Bradford Pilcher, was part of Scottish fund manager Abrdn Plc until last year, when it was acquired along with Hark Capital by P10, an alternative-assets management holding company. P10 said it expects to receive about $900 million in management fees generated by assets overseen by the two firms.

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