A Natixis Investment Managers-owned firm and Australian superannuation fund Hostplus are coming together to support new private equity firms in the U.S.
Flexstone Partners, an investment firm owned by Natixis, announced Thursday that it will invest in emerging private equity firms on behalf of Hostplus, one of Australia’s largest superannuation funds with $30 billion in assets under management.
“We think this is very attractive, particularly when we’ve done the analysis and looked at the returns,” Nitin Gupta, managing partner at Flexstone, said by phone Thursday. “We’ve seen that they tend to have returns that tend to be much stronger than the later stage funds.”
For asset managers with a large amount of capital under management, like Hostplus, it can be hard to invest in smaller, up-and-coming funds, according to Gupta. He said Flexstone is looking to invest in first, second, or third-time funds that are managed by investment professionals with strong track records.
“The goal is to find good managers who we think in the future could be top quartile funds,” Gupta said. “The idea is that as these fund managers grow, they could be strong relationships for us to have going forward.”
Hostplus is the superannuation fund for the hospitality, tourism, recreation, and sports industries in Australia, according to the announcement. Gupta declined to comment on how large the pool of capital Flexstone will invest on behalf of Hostplus will be.
“For Hostplus, developing and maintaining long-term partnerships with investment managers is critical to securing privileged access to successor funds and future deal flow,” said Sam Sicilia, chief investment officer of Hostplus, in the announcement.
[II Deep Dive: Natixis Buys Investors Mutual to Build Asia-Pacific Presence]
According to Benoit Jacquin, a managing partner at Flexstone, the firm hopes to offer a service like this to other superannuation and pension funds.
“The idea is to expand this offer and to personalize this program,” he said by phone Thursday.
Flexstone was founded in 2005 through the combination of four private investment firms: Caspian Private Equity, Euro-Private Equity France, Euro-Private Equity Swiss, and Eagle Asia Partners, according to the Natixis website. The firm had $6.7 billion under management as of September 30.