Morgan Stanley Said to Be Among Buyers of Calpers’ StakeSabrina Willmer
Morgan Stanley’s alternative investment unit and Carlyle Group LP’s AlpInvest Partners bought a more than $200 million stake in a private equity fund raised by a former unit of Silver Lake Management.
The firms acquired the position from California Public Employees’ Retirement System, the largest U.S. pension plan, which has been cutting back its private equity relationships, said two people familiar with the matter who asked not to be identified because the transaction was private. The $1.1 billion fund was raised in 2008 by Sumeru Equity Partners, formerly the middle-market buyout unit of Silver Lake.
Morgan Stanley and AlpInvest acquired the stake using funds that buy private equity holdings from investors seeking to exit their stakes, in deals known as secondary transactions. Over the past several years, Calpers has been scaling back its private equity portfolio with the aim of concentrating bets with the best-performing managers.
As part of the deal, the buyers committed fresh capital to a new fund being raised by Sumeru Equity Partners, which became independent from Silver Lake last year after the company abandoned efforts to raise a $1 billion fund, the people said.
Calpers’ $220 million investment in the fund was valued at $281 million at the end of June, according to the pension plan’s website. Sumeru Equity Partners, led by Kyle Ryland, is seeking $600 million to make private-equity investments in growth-oriented technology companies, three people with knowledge of the matter said in April. UBS AG is helping with the process.
Gordon Goldstein, a spokesman for Silver Lake, declined to comment, as did Joe DeAnda, a spokesman for Calpers, Matt Burkhard, a spokesman at New York-based Morgan Stanley, and Elizabeth Gill, a spokeswoman for Washington-based Carlyle.
Calpers has sold large portfolios of fund stakes and more recently, has done one-off sales of stakes in single funds. In 2013, it sold its anchor stake in a 2007 fund managed by the distressed investment unit of Los Angeles-based Aurora Capital Group. David Brailer’s Health Evolution Partners last year sought to sell Calpers’ stake after lackluster returns, said two people with knowledge in July.