LP consortium announces $1.5bn seed platform

Oscar Geen and Steffan Navedo-Perez, Inframation
23 February 2018

Tweet
Facebook
LinkedIn
Google plus
Send to

A consortium of RPMI Railpen, The Alaska Permanent Fund Corporation and the Public Institution for Social Security of Kuwait (PIFSS) has announced Capital Constellation, a private equity and alternatives seeding platform, with an initial commitment of $700m.

The venture is advised by alternative asset manager Wafra and expects to deploy $1.5bn over the next five years.

PIFSS has made an initial commitment of $300m while Alaska Permanent and RPMI invested $200m each.

The platform has simultaneously announced its first investment, a $100m commitment to the first time fund of Washington-based TMT specialist Astra Capital Management.

Wafra managing director and president of Constellation Daniel Adamson told Unquote that no other managers have been preselected and Constellation is looking to partner with 10 of the most promising first-time managers over the next five years.

Constellation said that it will leverage the expertise of its partners across three continents (North America, Europe and the Middle East) to support its GPs.

Wafra will be responsible for manager identification, due diligence and selection. It will consider managers in illiquid alternatives including private equity, real estate and infrastructure.

The seeded managers will operate independently and use standard fund structures with Constellation as their largest LP. However, Constellation will also share in the upside of the GP through revenue-sharing agreements, according to Adamson. He added that both Constellation and the LPs that comprise it have the flexibility to make co-investments where appropriate.

All three partners have experience of investing in PE funds individually. RPMI allocated 9.3% of its £26bn assets under management (AUM) to PE as of December 2016, and most recently backed Palatine Private Equity's impact fund, according to Unquote Data.

Alaska Permanent intends to increase its exposure to PE from 11% to 14% over the next two years. Its total AUM is $64.4bn and has backed brand name GPs including CVC, Nordic Capital and Onex Partners in the past two years, according to Unquote Data.

PIFSS has previously made its PE investments via Wafra; its total AUM is $19.9bn, of which $7.5bn is allocated for alternative investments.