Why Investcorp is buying Mercury

May 31, 2019 '

Why Investcorp is buying Mercury

We don’t often see managers buying placement agents, but in this instance the rationale is clear.

In an industry in which growth is currently the norm (spoiler alert: our PEI 300 will show this next week), Investcorp stands out as pursuing it faster than most.

The Bahrain-listed alternatives investment firm has been on an acquisition spree in the last year. It forayed into Asia with a $250 million anchor investment in a Chinese manager’s tech fund and the acquisition of Mumbai-based IDFC Alternatives’ private equity and real estate units. The firm has also picked up a 40 percent strategic stake in a Swiss private bank and launched Strategic Capital Group, a unit that will acquire minority stakes in mid-sized alternative asset managers.

This activity is all designed to fuel an ambitious growth plan to grow AUM to $50 billion in the medium-term from $22.5 billion as of end-December 2018. It also puts into perspective the firm’s acquisition of New York-based placement firm Mercury Capital Advisors.

Investcorp has acquired 100 percent of Mercury. Four representatives from Investcorp will join Mercury’s board of directors post-acquisition, with Mercury’s management team continuing to run the business.

It’s not totally unheard of for a GP to buy a placement agent, but it is rare. Blackstone used to own Park Hill Group before spinning off the business in September 2015 to combine with PJT Partners. We are more used to seeing investment banks pick up placement agents, such as Houlihan Lokey’s acquisition of BearTooth Advisors last year or Stifel Financial and Eaton Partners in 2015.

For the Bahrain-listed firm, it’s a strategic play. Investcorp is at a point at which raising institutional capital and reaching new investors are top priorities. The firm has historically raised the bulk of its capital from wealthy families and individuals in the Middle East. This year it has already sealed two big secondaries transactions that have ushered Coller Capital and Harbourvest into its investor base and raised fresh capital for both its buyout and tech sector programmes. The firm raised $548 million in the last six months of 2018, according to its most recent results, more than double what it raised in the same period the year before.

The acquisition of Mercury brings more than 50 fundraisers across 14 offices into a firm with global growth plans. Last year, Mercury facilitated over $6.5 billion in aggregate capital commitments in North America, Asia and Europe across private equity, private credit, real estate, secondaries and direct transactions. Mercury also has iFunds, a fintech platform offering family offices and wealth advisors access to alternatives investments.

Mercury will continue to operate as an independent placement agent, the two firms said this week, but it would defy logic to think its fundraisers won’t be unleashed on Investcorp’s own products.

In this context, the deal makes perfect sense.

Jun 03, 2020

Opportunity-Zone Funds Gaining Momentum

After a slow start, managers of opportunity-zone funds have been raising capital at an accelerated rate, according to Real Estate Alert’s second-annual review of the sector. Twenty-two sponsors working independently…

Apr 22, 2020

Oaktree Leads Rush of New Distressed Funds Seeking $30B

A wave of distressed debt and special situations funds has hit the market in recent weeks in response to the Covid-19 pandemic downturn, jumpstarting a segment that had dwindled to…

Apr 08, 2020

Crisis Sidetracks Fund Shops’ Equity Raises

The coronavirus chaos is taking its toll on fund managers’ capital campaigns. Operators across the country are postponing initial and final closes, or discuss­ing doing so, as investors focus on…

Mar 20, 2020

PE giants eyeing 2 opportunities amidst COVID

We talked to 14 private-equity insiders about how they’re planning to play the coronavirus turmoil. They identified 2 huge opportunities. Market chaos is creating crises and opportunities. Private-equity firms are…

Mar 20, 2020

LPs Slow Pledges to Debt Vehicles

Demand for high-yield-debt funds appears to have softened in the past year. The amount of equity raised by active closed-end vehicles is down for the first time since 2013, according…

Mar 18, 2020

Investors Tap the Brakes on Fund Commitments

After several years of explosive growth, the market for high-yield real estate funds is slowing. The total amount of equity managed in closed-end funds fell for the first time since…

Jan 15, 2020

Bain, TPG Go Long in Major Push into Public Equities

Bain Capital and TPG have rolled out new vehicles focused on long-hold public equities – aiming for billions of dollars in new capital and further blurring the lines between the…

Aug 21, 2019

Brookfield Grabs Quick $1B in New ‘Special Opps’ Push

By Tom Stabile Brookfield Asset Management raised a quick $1 billion last quarter in a new wide-angle special opportunities fund – aiming for a less travelled product area in which…

May 31, 2019

Why Investcorp is buying Mercury

We don’t often see managers buying placement agents, but in this instance the rationale is clear. In an industry in which growth is currently the norm (spoiler alert: our PEI…

May 23, 2019

Mercury Capital Advisors Group Announces Strategic Investment by Investcorp

Mercury Capital Advisors Group, L.P. (“Mercury”), one of the world’s elite institutional capital raising and investment advisory firms specializing in alternative investments, today announced that it has entered into a…

May 01, 2019

Private Briefing: Young PE Firms Double Down On Entrepreneurship

When Alex Navab left KKR & Co. LP (KKR) two years ago after running the firm’s Americas private equity unit, his resume would have opened doors at the largest PE…

Apr 10, 2019

PEI: Side Letter

Mercury rising. Mercury Capital Advisors has tapped Tom Donovan as a partner and one of three co-heads of global distribution. Donovan, whose CV includes stints at Lazard, Rede Partners and Credit…

Jan 23, 2019

Distressed Debt Funds Slide Back into Spotlight

Distressed debt managers are primed for a new round of fundraising this year as investors see global economic hiccups setting the table for investments into troubled companies and deals. And…

Oct 09, 2018

Q3 Secondaries Fundraising Hits Second-Biggest High

Five secondaries funds closed in Q3 2018, compared with seven in the same period of 2017, withLandmark XVI the biggest. Secondaries funds raised a shade less in the third quarter…

Aug 31, 2018

Twenty Fundraisers with Pulling Power

Who would you want to be working alongside if you had a pool of private debt capital to raise? From that question, we identified some of the industry’s key players…

Aug 27, 2018

Public Pensions Flood Secondary Market with PE-Fund Stakes

Public pensions are loading up the secondary market with limited-partner interests in an environment of pricing as high as it’s ever been, according to Buyouts research and interviews with secondary-market…

Aug 14, 2018

AlpInvest Becomes First Outside Investor in Ex-Clinton Adviser’s Firm

AlpInvest Partners led a $260 million capital infusion in Stagwell Group, the investment firm launched by ex-Bill Clinton adviser Mark Penn, as part of a secondary process, the firms confirmed…

Aug 14, 2018

Stagwell Media LLC Secures $260 Million Investment From AlpInvest Partners

WASHINGTON, Aug. 14, 2018 /PRNewswire/ — The Stagwell Group and AlpInvest Partners today announced the completion of a $260 million capital raise by Stagwell Media LLC from investment funds managed…

Aug 10, 2018

The Private Equity Boss Who has to Handle Elon Musk

Antonio Gracias, the Tesla lead independent director dealing with the madcap buyout proposal launched by Elon Musk this week, is a private equity investor who has profited from a decades-long…

Apr 30, 2018

How Technology is Opening Private Equity to the Taxable Investor

MERCURY CAPITAL iFUNDS Launched this year, iFunds provides the same $100,000 entry point to the Qualified Purchaser (QP)as its peers, but with a Wall Street tint. The firm markets its…

×

By clicking on this link you will leave the Mercury Capital Advisors, LLC (“Mercury”) website and be taken to a website owned and operated by third parties. These links are provided for your information and convenience only and are not an endorsement by Mercury or the Mercury iFunds™ platform. Mercury has no control over the contents of any linked website and is not responsible for these websites or their content or availability. Mercury therefore makes no warranties or representations, express or implied about such linked websites, the third parties they are owned and operated by, the information contained on them or the suitability or quality of any of their products or services.

Accept