Capital Constellation has been formed by The Alaska Permanent Fund, the Public Institution for Social Security of Kuwait, RPMI Railpen, and Wafra to invest in next-generation private equity and alternatives managers.
The four founding partners of Capital Constellation will initially commit $700 million to the venture and are expected to deploy over $1.5 billion in the next five years. The operations of Capital Constellation will be advised by Wafra, a manager of private equity and alternative investments with $20 billion of assets and commitments under management. The firm has more than 100 employees including over 60 senior and other investment professionals. Wafra is headquartered in New York with an additional office in Kuwait (www.wafra.com).
Constellation’s stated mission is to assist alternative investment managers in breaking through the challenges of initial fundraising, specifically by providing strategic and operational support and an aligned, substantial and long-term capital base.
“We are thrilled to bring together three of the world’s premier institutional investors to establish Constellation,” said Russell Valdez, Senior Managing Director of Wafra and a founding board member of Constellation. “We believe this innovative investment platform will be a key resource for investment managers as they launch and build the next generation of successful and enduring private equity, real estate and other alternative investment franchises.”
“We are honored to be selected to advise this innovative joint venture and investment program,” said Fawaz Al-Mubaraki, Chief Executive Officer and Chief Investment Officer of Wafra. “Investing in partnerships is central to Wafra’s mission. I envision the Constellation platform as a symbiotic strategic partnership not only among asset owners seeking access to an outperforming asset class but also among next-generation alternative investment firms and their clients.”
Constellation has already committed $100 million of capital to Washington DC-based Astra Capital Management (www.astracapitalmgmt.com), an investor in communications and technology services companies. Astra makes control investments of $25 million to $100 million in companies that have enterprise values up to $500 million. Typical targets will be privately-held, small capitalization publicly-traded, founder-owned, or corporate divestitures. “We are excited to partner with Constellation as we begin our next phase of growth,” said Mark Johnson, Co-Founder and Managing Partner of Astra.
The Alaska Permanent Fund Corporation (APFC) was created by the Alaska Legislature in 1980 to invest and manage the assets of the Alaska Permanent Fund that has approximately $64 billion of assets under management. “We are pleased to create a platform that leverages our shared competitive advantages of stability, long-term orientation, and scale. Constellation adds a unique source of value to our portfolio that will help us continue to deliver substantial and lasting value to the State of Alaska,” said Steve Moseley, Head of Private Equity and Special Opportunities at APFC and a founding board member of Constellation.
The Public Institution for Social Security of Kuwait (PIFSS) runs the social security system for all Kuwaiti nationals spanning public and private sector professionals working at home and abroad. Assets under management are approximately $60 billion. “Combining forces with leading institutional investors through Wafra will enable us to find future stars in the investment space. Looking for long-term partnerships should be a key to our success,” said Meshal Al-Othman, Chief Investment Officer of PIFSS.
RPMI Railpen is one of the UK’s largest pension funds with approximately £28 billion of assets under management. “We believe Constellation provides us unmatched access to the next generation of successful alternatives managers and will be a source of long-term returns that will help us achieve our mission to pay members’ pensions securely, affordably and sustainably,” said Paul Bishop, Railpen Investment Director and a founding board member of Constellation. “We think the historical outperformance of first-time funds is meaningful, as is the participation Constellation receives in GP economics.”
More information on Capital Constellation can be found at www.CapitalConstellation.com.
© 2018 Private Equity Professional | February 23, 2018