FROM: Don Pierce, Chief Investment Officer
SUBJECT: Patria Secondary Opportunity Fund V
RECOMMENDATION:
title
Patria introduction (as successor to Abrdn) and Secondary Opportunity Fund strategy update.
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BACKGROUND:
History and Patria Investments:
The program has been led by Patrick Knechtli since inception with SOF I in 2013 and was initially sponsored by Standard Life Capital (SL Capital). Under SL Capital, the SOF program launched two more funds: SOF II in 2014 with $291.1 million committed, and SOF III in 2016 with $427.5 million committed. Performance details are outlined in Table 1: SOF Investment Program Net Performance.
Table1: SOF Investment Program Net Performance
Fund Name
Vintage
SBCERA Commitment
TVPI
DPI
IRR
SL Capital SOF I LP
2014
$25 million
1.3x
1.3x
9.5%
SL Capital SOF II LP
2014
$25 million
1.3x
1.3x
14.0%
SL Capital SOF III LP
2017
$25 million
1.8x
1.0x
21.2%
Aberdeen Standard SOF IV LP
2020
$40 million
1.7x
0.4x
38.5%
In March 2017, SL Capital merged with Aberdeen Asset Management to form Standard Life Aberdeen and launched SOF IV, a $506 million fund in 2020. In 2021, Standard Life Aberdeen was renamed Abrdn.
In 2022, Abrdn announced a decision to sell the Private Equity (PE) business and sold the U.S. PE business in October 2023 to HighVista Strategies and announced a sale of the European PE business to Patria Investments. Patria, a publicly listed (NASDAQ: PAX) global asset manager, is based in Sao Paulo, Brazil. The firm started in 1988 and manages over $40 billion in AUM across private and public equities, credit, infrastructure, and real estate. Mr. Knetchtli will lead the SOF V at Patria, which is discussed further below.
Private Equity Macro:
The global PE market has been severely impacted by interest rate hikes undertaken by the U.S. Federal Reserve. The new and much higher interest rate environment is impacting profitability and growth in privately held companies resulting in negative valuation adju...
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