Auda Advisor Associates LLC Group is raising its first co-investment private equity fund, which will invest in companies alongside sponsoring buyout and venture capital funds. The New York-based firm, which is targeting $300 million in commitments for the Auda Partners LP fund, previously raised six private equity funds of funds and has a total of $1.3 billion in commitments, said Stephen Wesson, managing director.
"We couldn't do a co-investment fund before because our funds-of-funds documents didn't permit it. We've built up relationships with several of the funds we invest in and want to invest alongside of them," he said.
Auda Partners probably will be structured with 70% in buyout investments and 30% late-stage venture capital. "It's a good time to do buyout deals, because it gives a source of capital to those companies that can't raise debt financing," Mr. Wesson said.
The firm expects to invest a minimum of $10 million of its own money in the fund.
While co-investment private equity funds are rare, General Motors Asset Management, New York, also has been raising a similar fund, known as GM Capital Partners I. Jerry Dubrowski, spokesman for GMAM, said that the GM co-investment fund "won't completely close until January." He wouldn't specify the amount that GM will co-invest.
So far, the $112 billion New York State Common Retirement Fund, Albany; and the US$7.1 billion Canada Pension Plan Investment Board and US$23.7 billion Ontario Municipal Employees' Retirement System, both of Toronto, are participating in the GM fund, investing $100 million, $150 million and $100 million, respectively.
Mr. Wesson said Auda is targeting a different audience, primarily smaller public funds with $1 billion in assets or less with little exposure to the asset class and little access to private equity managers.
Auda was started in 1989 in New York to advise the family of Harald Quandt, which has historical ties to BMW, on its U.S. investments. Limited partners have included the Quandt family and other wealthy European families, as well as the $6.96 billion Systems Pension Scheme, Farnborough, England; the $585 million Henry Luce Foundation, New York; and the $500 million endowment of Denison University, Granville, Ohio.