According to Wall Street Journal’s Jonathan Shieber The “zombie” funds bedeviling investors in private-equity funds may have met their match with the launch of a new firm called NewGlobe Capital.
Backed by private equity asset manager Hamilton Lane and multistrategy private equity firm Vanterra Capital, NewGlobe expects to spend more than $1 billion over the next two to three years to buy out what it calls ‘end-of-life’ and ‘disrupted cycle’ private-equity funds, according to Andrew Hawkins, the chief executive and founder of NewGlobe.
Hamilton Lane will provide capital, while Vanterra will provide financial, strategic and operational support and co-invest alongside the multi-billion-dollar asset manager.
According to a May 2012 article in The Wall Street Journal, of the 10,000 private-equity funds raised over the past decade, at least 200 now qualify as zombie funds, vehicles that aren’t making new investments but still tie up investors’ money and charge them fees. Such funds hold as much as $100 billion of the $1.5 trillion invested in private equity overall, according to consultants TorreyCove Capital Partners.