FORT WORTH, Texas, May 4, 2017 /PRNewswire/ -- Crestline Investors, Inc. ("Crestline"), an institutional alternative asset manager, today announced the closing of four recent transactions by its Private Equity Credit and Fund Restructuring team. The group, first launched in October 2016, pursues niche financing opportunities in the private equity markets by providing bespoke capital solutions, including preferred equity and flexible debt structures, to mature private equity funds approaching the end of their structural lives. In total, Crestline-controlled vehicles committed more than $200 million across the four transactions and assumed governance rights across another $250 million of capital contributed or rolled by existing investors.
Recently closed deals encompassed a broad range of industries, such as healthcare, financial services, energy, construction and building materials, technology, security, media, consumer and business services, and included:
- A preferred equity investment into a 14-year–old private equity (PE) fund that has significant asset value remaining in its portfolio. This investment allowed the general partner (GP) to provide liquidity to a group of investors as well as recycle some of the new capital into the largest portfolio company to refinance out more expensive debt.
- A preferred equity investment into a new holding company that acquired the assets from two affiliated funds. This investment provided capital that was used to purchase existing limited partner (LP) interests as well as finance targeted follow-on investments into the remaining holdings.
- Loans to several portfolio companies that were credit enhanced by a fund level guarantee. This facility enabled several portfolio companies to borrow capital to support growth initiatives accretive to the fund.
- A combined preferred equity and common equity investment into an acquisition vehicle that purchased a fund and its holdings out of receivership and simultaneously injected fresh capital into the largest portfolio company.
"These deals show that there is significant need for financing in the private equity markets, satisfying a range of liquidity requirements for both Limited Partners (LPs) and General Partners (GPs)," said David Philipp, a Managing Director at Crestline and co-head of the PE Credit & Fund Restructuring Group. "Crestline is committed to being a leader in this growing area, which is a natural extension of our expertise in the broader credit and restructuring markets."
In addition, Crestline announced that Michael Rich would join the PE Credit team as a Director. Rich was previously a Director at LStar Capital, the credit affiliate of Lone Star Funds, a leading private equity firm. His previous roles include Co-Founder & Principal at Three Seas Capital, Portfolio Manager at Highland Capital Management and Vice President at Banc of America Securities.
Rich's addition brings the size of the team to nine dedicated professionals, plus three operating partners, with diverse backgrounds in portfolio financing, Private Equity and Hedge Fund (HF) secondaries, direct secondaries, credit underwriting, fund restructurings, PE investing, co-GP engagements, workouts and valuations. Rich is the second senior-level hire following the addition of Amit Mahajan in October 2016, who co-leads the strategy with Philipp.
"There are many private equity funds out there whose portfolio companies require follow-on funding, but existing LPs are unable or unwilling to invest additional capital," said Mahajan. "Previous solutions to this problem were either costly, slow or both, and we have been able to step in as an investor to provide one-stop debt or equity financing that can be customized to meet the needs of all parties."
The PE Credit & Fund Restructuring Group manages dedicated capital across two core strategies:
(1) Providing liquidity and financing solutions to private equity funds, structured as preferred equity or senior debt, and
(2) Restructuring older funds and acquiring final positions held in tail end funds.
"GPs and LPs continue to look for alternative financing and liquidity solutions not met by traditional secondary markets," said Douglas Bratton, Managing Partner & CIO of Crestline. "We see an opportunity for Crestline to help fill the current gap in the market by working directly with GPs and LPs to help them maximize the value of their assets."
About Crestline Investors, Inc.
Crestline Investors, Inc., founded in 1997 and based in Fort Worth, Texas, is an institutional alternative investment management firm with approximately $9.3 billion1 of assets under management. Crestline specializes in credit and opportunistic investments, including financing and restructuring solutions for mature private equity funds. In addition, the firm manages a multi-PM equity market-neutral hedge fund, and provides beta and hedging solutions for institutional clients. Headquartered in Fort Worth, Texas, the company maintains affiliate offices in New York City, Chicago, London, Toronto and Tokyo. For more information, please visit www.crestlineinvestors.com.
212-279-3115 ext. 243
1 As of March 31, 2017
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SOURCE Crestline Investors, Inc.