Crestline Investors and Kirchner Group are partnering to launch a new business unit called Crestline-Kirchner Private Equity Group, confirmed officials from both firms Tuesday.
The new business unit will be part of the existing Crestline platform and focus on acquiring, managing and investing in underperforming private equity assets and funds. A core group of employees on Kirchner's money management side will lead the business line, led by W.B. “Bud” Kirchner, founder and chairman.
Kirchner Group will work with Crestline to take Kirchner's money management business to the next level, said Dave Philipp, senior adviser at Kirchner Group. “We needed the ability to scale our business on an institutional platform,” Mr. Philipp said. “We could build it up over time or partner with the right group.”
The business is modeled off of Kirchner's existing “Successor GP” program, which focuses on taking over so-called zombie funds and creating value for the investors. The new business unit will focus on replacing or complementing general partners to better align interests, advising limited partners, creating successor funds, and sourcing and structuring investment opportunities.
“There's a lot of creativity you can do as long as it revolves around transparency and realignment,” Mr. Philipp said.
Douglas Bratton, president and chief investment officer of Crestline, said the partnership made “strategic sense,” as Crestline already has nearly $2 billion in assets under management in opportunistic strategies in the secondary hedge fund market.
Crestline has about $7.2 billion in assets under management. Kirchner manages about $250 million in its secondary private equity business.