The $60 billion Future Fund has taken a stake in one of the world’s largest private equity firms.
The Fund has joined other investors in taking a collective stake of around 10 per cent in the Apax Partners management company and the carried interest in Apax funds.
A Future Fund spokesperson said the net proceeds of the deal, which was finalised by Steve Byrom’s private equity team before Christmas, "are being re-invested in a permanent capital vehicle in which the Future Fund will have a 10 per cent stake. This vehicle’s principal objective is to invest in Apax funds…None of the proceeds have been used to cash out any of the selling equity partners."
Rumours of this deal first surfaced in the UK last August, when the Future Fund, Singapore’s Government Investment Corporation and an undisclosed Japanese investor were reported by The London Times to be close to buying 10 per cent of Apax, in a deal which was then thought to have valued Apax at 1.5 billion British pounds.
The deterioration in credit markets and economic outlook in the second half of 2008 would have made Apax a less expensive proposition since then – its website reports no acquisitions since August 2008 and it was most recently said to be considering an equity injection into a trade publishing investment, Incisive Media, which has breached debt covenants following a severe advertising slowdown.
The Future Fund spokesperson said Apax was a highly respected firm, and pointed out the deal provided the Fund with access not only to the performance of the management company and existing Apax funds, but to all subsequent funds as well.
The Apax stake is one of several recent investments made by the Future Fund.
It has joined Queensland Investment Corporation as an Australian investor in Makena Capital Management, an alternatives manager that offers an endowment-style product run by the former chief executive of the Stanford university endowment, Mike McCaffery.
It has also recently awarded private equity mandates to Charterhouse Capital Partners and Towerbrook,a debt securities mandate to Ares Management and a distressed debt mandate to New York’s King Street Capital.