Crestline Investors and the Kirchner Group have partnered to form the Crestline-Kirchner Private Equity Group which will focus on acquiring, managing and investing in underperforming private equity assets, portfolios and funds. The group will be led by W.B. (Bud) Kirchner, founder of the Kirchner Group.
“We are pleased to welcome Bud and his team to Crestline and to add a powerful new business to our institutional platform,” said Douglas Bratton, President and Chief Investment Officer of Crestline. “The team brings to Crestline a 28-year track record of restructuring companies and has been successfully deploying its model across a series of portfolios ranging from early stage venture to mid-market buyout since 2004.”
There is an estimated $100 billion in private equity assets managed by funds past their investment periods, according to industry estimates. Many of these so-called “zombie funds” have issues of alignment between the general partner and limited partners. As a result, an increasing number of institutional investors are looking for ways to restructure these funds and rationalize their private equity portfolios.
“This partnership provides tremendous validation of a model that we pioneered years ago at Kirchner Group,” said Mr. Kirchner. “Limited partners are realizing that there are alternative solutions to underperforming funds, and now is the right time for us to scale up to meet rapidly increasing market demand. I am excited to join with Crestline to continue building on the business lines that we have developed, giving us the institutional infrastructure and access to capital to best serve investors.”
The Crestline-Kirchner Private Equity Group will focus on the following:
- Successor General Partner: Acting as a fiduciary to replace or complement the general partner in order to help better align interests, find liquidity and maximize value for limited partners.
- Advisory Services for Limited Partners: Managing or monitoring an existing troubled portfolio of private equity funds on behalf of limited partners.
- Successor Fund Creation: Consolidating direct private equity investments into a fund structure to help manage, monitor and exit positions on behalf of a direct private equity investor or group of investors.
- Investment Opportunities: Sourcing and structuring investment opportunities including: secured lending and/or investments in private equity portfolios to provide follow-on capital at the portfolio level; secondary purchases of some or all of a fund’s limited partnership interests; and providing follow-on capital at the portfolio company level.
Crestline Investors is an institutional alternative investment management firm with $7.2 billion of assets under management. The firm was founded in 1997 and has 84 employees with 42 investment professionals across its offices in Fort Worth, New York and Toronto (www.crestlineinvestors.com).
The Kirchner Group is a mid-market merchant bank that provides asset management services for institutional investors as well as operational and transactional support for companies. The firm is based in Gadsden, AL (near Birmingham, AL) (www.kirchnergroup.com).
© 2013 PEPD • Private Equity’s Leading News Magazine • 4-30-13