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Private Equity

Overview

Our Team1

Our Private Equity Team serves as the North American private equity manager for our UK Parent and its affiliates. With approximately $905 billion in assets under management,2 our affiliates form one of the world’s leading financial services organizations, with investment management and insurance businesses located around the globe.

We’ve been participating in private equity opportunities on behalf of our clients since 1991. We invest in both direct co-investments in sponsor-led transactions as well as unaffiliated third-party funds. Since inception, we have committed over $6.9 billion in private equity capital, covering over 180 direct co-investments, 260 fund investments and over 100 fund managers.

Our Private Equity Team benefits from significant experience and continuity. It is comprised of 10 investment professionals, who average 22 years investment experience and 17 years working together at PPM. This experience leads to access to a wide and diverse set of opportunities. The team has built a strong network within the private equity community through its existing partnerships with private equity fund sponsors and experience co-investing; working relationships with intermediaries; and participation on numerous boards of directors, fund advisory boards and industry forums.

Our Strategies

Donut chart showing 3 different portions which make up $2.8 Billion in AUM.

Investor Base1

We manage sizeable AUM for a stable private equity investor base comprised of affiliated companies in the US and abroad. Our investors include Jackson, one of the largest life insurance companies in the US as well as insurance companies in the UK and Asia.

For more information about Jackson, please click here.

  • United States, $1.5B
  • Europe, $1.1B
  • Asia, $0.2B

Capital Base1

We have historically committed approximately $4.0 billion in third party funds on behalf of our clients. In addition, we have raised approximately $2.9 billion from our affiliated clients for seven investment funds focused on sponsor led co-investments in buyouts, recapitalizations and growth opportunities.

Investment Strategies

Co-Investments1

We actively pursue direct co-investments with private equity investors, primarily in buyouts, recapitalizations and growth opportunities. We have invested approximately $2.9 billion in such opportunities, spanning more than 180 different investments. Historically, these transactions have covered a wide array of both sponsors and sectors, with an emphasis on building the value of our clients’ portfolios through the long term appreciation of our investments.

Primary Fund Investments1

Since the inception of our Private Equity Team, we have committed over $4.0 billion to over 260 third-party private equity funds on behalf of our clients. Our focus for fund investing is primarily on North American buyout and growth opportunities, but we also have the ability to take advantage of opportunities in funds focused on secondary, distressed or other alternative investment types. We work collaboratively with clients with an emphasis on building client portfolios that are diversified by asset type, industry, manager and vintage year in order to manage risk and seek enhanced returns.

Partnerships

We view ourselves as a partner to both private equity sponsors and company management by providing assistance in financings, acquisitions and other strategic, board-level issues. Such partnerships are primarily generated through our deep network of relationships; the access this grants us to opportunities is critical to our success. Many of these relationships are more than 20 years in the making with touchpoints throughout the organizations. With nearly 30 years of experience investing in private equity, we have experienced many different markets and situations and have maintained a consistent presence in the market throughout these times. We consider ourselves a value-added partner to our private equity sponsors, often providing insight into current market terms, structures, etc., based on our experience and longevity investing in private equity as well as our relationships with other limited partners and industry organizations. We maintain a forward-looking calendar of private equity funds coming to market and engage in relationship-building and due diligence well in advance of target managers’ fundraising processes. Relationships with fund managers are also strengthened through our co-invest activities, which allows us to observe the underwriting and due diligence processes of fund managers firsthand.

Our goal is to build the value of our portfolio companies, and the primary source of profit is through the appreciation of our clients’ investments rather than from fees or interest payments. While we are often represented on boards of directors or hold observer or advisory seats, we do not expect to have involvement in the day-to-day operations of the companies or funds in which we invest.

Approach

Co-Invest

Typically, we target co-investments between $15 and $50 million in companies with enterprise values in excess of $1 billion. Our private equity co-investments have generally focused on taking minority positions in the following transaction types:

Management Buyouts and Recapitalizations

  • We have been involved in management buyouts and recapitalizations since our Private Equity Team’s inception.
  • We strive to provide prudent financial structures that afford portfolio companies the greatest degree of flexibility.
  • We partner with other investment firms to invest in management buyouts and recapitalizations for companies with enterprise values that typically range from $50 to $500 million.
  • Our investments have covered a wide variety of industries, including services, software, healthcare, information technology, consumer and manufacturing.

Growth Equity

  • We are an active investor in growth equity, with a focus on later-stage growth equity, structured equity, and companies that are growing their way to profitability
  • We are also a strong supporter of companies that are looking to grow by acquisition, whether as part of an industry consolidation strategy, or a transformative acquisition being made by the sponsor
  • In all of our underwriting, a key part of our analysis is to focus on backing sponsors who are well-experienced in both the strategy and industry at hand

Primary Fund Investments

We have a long-term track record managing assets for institutional clients through multiple market cycles. Since our Private Equity Team’s inception, we have committed to over 260 funds through relationships with over 100 fund managers, with many of these relationships exceeding 20 years. Our strong network provides access to a wide and diverse set of opportunities across industries and asset types. We have access to funds of a varying size and strategy, with a focus primarily on funds concentrated in middle market companies, typically as defined by having annual revenues ranging between $50 million and $2 billion and EBITDA between $10 and $200 million. Our fund commitments typically represent less than 5% of total fund assets, and our fund commitments are typically over $300 million annually.

We have developed a rigorous investment process designed to select funds we believe have the greatest potential for top-quartile performance. Key criteria we look for when evaluating fund managers includes:

  • Cohesive, high-quality management teams
  • Stable organization with low turnover
  • Deep domain expertise with a consistent, focused strategy
  • Attractive long-term track record with low loss ratios
  • Robust, high-quality deal flow
  • Strategy to add value to the portfolio
  • Package of terms and conditions that align interests of general partners and limited partners

We build our clients’ private equity fund portfolios in a disciplined manner, with a focus on achieving portfolio diversification through the following areas:

  • Sub-Asset Class: We primarily focus on growth, lower mid-market and mid-market buyout funds while also opportunistically investing in distressed, secondary and credit funds.
  • Vintage Year: We construct portfolios of underlying investments originated in various phases of the economic cycle, to ensure diversity across years and economic cycles.
  • Manager: For each of our clients’ portfolios, we generally make commitments across 25 to 40 core managers – adding new managers and culling others as warranted.
  • Industry: Since many private equity sponsors concentrate on one or two industry sectors, we emphasize industry diversification when constructing client portfolios. We invest in funds where the private equity sponsor has a strategy and/or competitive advantage in their space.
  • Other: In addition, we look for private equity sponsors that have differentiated expertise in sourcing quality investments including, geographic expertise, partnerships with sellers, types of structures – all of which give them a competitive advantage in the market.

Advantage

Expertise and Continuity

Our ability to successfully identify and close opportunities is supported by our strong industry experience and team continuity. The 10 members of our private equity investment team average 22 years of investment experience, and the top two partners have worked together for nearly 30 years, while the majority of the team has worked together more than 10 years. This deep experience, in tandem with our broad network of industry contacts and resources, is integral to our long track record of analyzing and closing successful private equity investments.

Access to a Diverse Set of Opportunities

We have built strong and lasting connections with fund managers throughout our history and appreciate the critical contribution that such relationships have made in sourcing opportunities and in turn producing favorable investment results for our clients. We are active in the market through various professional organizations, investor groups, industry conferences, contact with placement agents, etc., which all provide us insight into the market for new opportunities. 15+ year relationships with private equity sponsors are common. These relationships are strengthened by participation on fund advisory committees and optimized through the direct co-investments that we make with many of the same private equity sponsors.

Disciplined Investment Approach

We believe our investment approach benefits from the best of both worlds – adaptability and rigor. We use both qualitative and quantitative tools to review our performance and the performance of our general partners in order to inform us in future decision-making regarding co-invest and fund opportunities. We are able to adapt our selection approach to take advantage of unique opportunities as they arise while also maintaining a rigorous, comprehensive due diligence process and post investment monitoring. We conduct a thorough review of track records, strategies and processes in addition to performing third-party legal and compliance reviews and background checks. This streamlined approach allows us to quickly identify and respond to co-investment and fund opportunities.

Deals

See examples of our co-investments and fund commitments over the past 12 months.

Co-Investments
Fund Investments

Investment Team

Experience and Stability1

The 10 members of our private equity investment team average 22 years of industry experience, the top two partners have worked together nearly 30 years and the majority of the team has worked together more than 10 years. Together, they have made hundreds of investments on behalf of our clients while benefiting from continuity of leadership, team and institutional knowledge. The team is supported by seven finance and accounting professionals, who assist with information processing, analytics, reporting and client communications. These individuals also possess a significant level of industry experience and tenure at PPM.

  • Bruce Gorchow
    President, PPMACP and Executive Vice President, Private Equity, PPM
  • Scott Rooth
    Executive Partner, Private Equity
  • Claudia Baron
    Partner, Head of Primary Fund Investments, Private Equity
  • Austin Krumpfes
    Partner, Head of Co-Investments, Private Equity
  • Champ Raju
    Partner, Private Equity
  • Mark Staub
    Partner, Private Equity
  • Craig Radis
    Partner, Private Equity
  • Kevin Keefe
    Partner, Private Equity
  • Ray Zhang, CFA, CPA
    Partner, Private Equity
  • Tiffany Ramirez
    Analyst, Private Equity

1 As of 30 June 2018.

2 Our UK Parent and its affiliated companies constitute one of the world’s leading financial services groups. It provides insurance and financial services directly and through its subsidiaries and affiliates throughout the world. It has been in existence for more than 169 years and has approximately $905 billion in assets under management as of 31 December 2017. The UK Parent is not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America..

Any references to sponsor-led co-investments (or “co-investments” or “direct co-investments”) on this website refer to those activities and transactions of PPM America Capital Partners, which is the name used to refer collectively to PPM America Capital Partners, LLC; PPM America Capital Partners II, LLC; PPM America Capital Partners III, LLC; PPM America Capital Partners IV, LLC; PPM America Capital Partners V, LLC; PPM America Capital Partners VI, LLC, and PPM America Capital Partners VII, LLC, each of which is the general partner, respectively, for PPM America Private Equity Fund LP; PPM America Private Equity Fund II LP; PPM America Private Equity Fund III LP; PPM America Private Equity Fund IV LP; PPM America Private Equity Fund V LP; PPM America Private Equity Fund VI LP; and PPM America Private Equity Fund VII LP (collectively, the “PPM America Private Equity Funds”). The PPM America Private Equity Funds are closed to new investors, although new PPM America private equity funds may be offered in the future. PPM America does not intend to solicit or make its private equity funds available to the general public. Under no circumstances should information regarding our private equity funds or capabilities be considered as an offer to sell, a recommendation regarding or a solicitation of an offer to buy any securities or interests in private equity funds sponsored by PPM America. Private equity investments are suitable only for sophisticated investors who meet applicable standards under relevant US securities laws. Any future private equity offering would be available only to investors that meet such standards.

Investing in private equity funds is speculative and involves a substantial degree of risk. Risks include, but are not limited to the fact that private equity funds have or may have: a limited or no operating history, volatile performance, leverage use, limited liquidity with no secondary market expected and restrictions on transferring interests; high fees and expenses and a dependence on PPM America Capital Partners to select and manage fund investments.

Prospective investors should carefully consider these risks in determining whether an investment is suitable. Nothing herein should be construed as investment advice, an opinion regarding the appropriateness or suitability of any investment, or an investment recommendation. No representation is made that the objective of any investment or strategy will be profitable or will not incur losses. Prospective investors should consult their own legal, accounting, tax and other advisors in order to make an independent determination of the suitability and consequences of an investment.

Any references to unaffiliated third-party funds (or “fund investments” or “third-party funds”) on this website refer to investments made by PPM America, Inc. (PPM) directly on behalf of its affiliates: (1) Jackson National Life Insurance Company (“Jackson”), (2) The Prudential Assurance Company Limited ("PACUK"), directly or through PACUS UK Limited ("PACUS"), as its nominees, and (3) a Cayman Islands vehicle owned by Eastspring Investments SICAV-FIS Alternative Investment Fund, in which affiliated Hong Kong and Singapore life insurance companies are the investors (“Eastspring”). All are indirect subsidiaries or affiliates of PPM America, Inc.'s UK Parent.