Helical Capital brings global private equity to SA
The relatively new local private equity firm has partnered with Swiss-based Partners Group, which manages $83bn worth of funds
Local private equity firm Helical Capital Partners has reached an agreement with Swiss-based counterpart Partners Group to provide investors with access to unlisted investments in developed markets through a new fund.
The Partners Group Global Value 2019 fund, which will be denominated in US dollars, will be marketed to institutions and high net worth individuals.
“The fund will have a primary geographical focus in North America and Western Europe and a secondary focus on Asia-Pacific and the rest of the world,” says Craig Beney, Helical Capital Partners co-CEO. Partners Group currently manages $83bn across its 19 offices worldwide.
The fund will allocate money across three baskets: primary (30% of assets), secondary (20%), and direct investments (50%).
Direct investments comprise transactions in which Partners Group makes a minimum investment of $200m. The group adheres to strict investment criteria, one of which favours investing in dominant players in each respective industry.
“Partners Group, for the most part, take majority shareholder positions and the focus is to provide capital and expertise through what is called ‘industry value creation’ to grow the business before ultimately exiting after a period of approximately five years,” says Beney.
Primary and secondary investment involves Partner Group acting as a fund-of-fund manager by allocating money to established private equity funds, which have a specific geographical or industry focus. Where primary investment entails joining a fund from the beginning, secondary investment relates to joining at a later stage in the fund lifecycle either through the purchase of the remaining assets or the purchase of a limited partners interest in the investment partnership.
“This means investors get immediate access to a diversified portfolio of investments, as well as the Partners Group pipeline, shortening the time to deploy capital. Investing in the fund is more akin to hopping on a bus as it progresses on its route than the more conventional way of committing to a fund during the fundraising stage and then having to waiting for it to deploy investments,” says Carlos Ferreira, Helical co-CEO.
Warren Ingram, a director at Galileo Capital, said with all the “uncertainty we have had over the Zuma years, there has been an incredible drive to invest overseas.”
“For high net worth individuals that typically have a large exposure to SA through businesses and investments, getting exposure to large, unlisted companies active in developed markets would be desirable. So it’s a rational formal of diversification, just always consider fees,” he said.