Kennedy Lewis Investment Management Announces Strategic Investment from Petershill at Goldman Sachs Asset Management

Rhea-AI Summary

Kennedy Lewis Investment Management announces a passive, minority investment from Petershill at Goldman Sachs Asset Management. The investment aims to align interests with clients, accelerate business growth, and attract top professionals. Azimut Alternative Capital Partners, will divest its minority equity interest. The investment will not impact Kennedy Lewis' operations.

Insights

Financial Analyst

The minority investment by Petershill into Kennedy Lewis Investment Management can be a strategic move for the latter, potentially enhancing its capacity for growth and expansion. The infusion of capital typically allows a firm to invest in talent and operational capabilities, which can lead to increased competitiveness in the credit market. Kennedy Lewis' commitment to maintaining its existing investment process and management team indicates stability and continuity for clients and investors.

From a financial perspective, the divestment of AACP's stake and the new partnership with Petershill could be seen as a reconfiguration of Kennedy Lewis' shareholder structure, potentially providing a fresh perspective and additional resources. For stakeholders, the alignment of interests with a well-regarded entity like Petershill may signal confidence in Kennedy Lewis' future prospects.

However, it's important to monitor how the partnership evolves over time, ensuring that the 'passive' nature of the investment does not shift, which could affect the firm's strategic direction. Additionally, one must consider the broader market conditions and how Kennedy Lewis' opportunistic, industry-focused approach will perform, particularly in a fluctuating economic landscape.

Market Research Analyst

The private credit sector, where Kennedy Lewis operates, has seen increased interest from investors seeking alternatives to traditional fixed income investments. The firm's focus on specialized areas of the credit markets that are underserved by traditional lenders is a competitive advantage, as it can cater to a niche demand.

Petershill's investment could be interpreted as a positive market signal, potentially attracting further interest from investors looking for firms with strong backing and growth potential. The emphasis on Kennedy Lewis' ability to provide attractive potential returns and diversification could resonate well with investors seeking to hedge against market volatility.

It is also worth noting that the exit of AACP and the entry of Petershill may affect the dynamics within the GP Staking landscape. This transaction illustrates an active secondary market for GP stakes, which can provide liquidity options for investors and a benchmark for valuing such investments.

Legal Expert

The legal intricacies of this transaction, involving multiple parties and advisors, underscore the complex nature of investment management deals. The use of reputable legal advisors like Seward & Kissel LLP, Sidley Austin LLP and Kirkland & Ellis indicates a high level of due diligence and the importance of navigating regulatory and contractual frameworks effectively.

For existing and potential investors in Kennedy Lewis, the legal stability and compliance with regulations are key factors for long-term confidence. As the firm undergoes changes in its equity structure, it is important that all agreements uphold the firm's operational independence and safeguard investor interests.

Moreover, the continuity of Kennedy Lewis' investment process post-investment suggests that contractual terms have likely been established to prevent any interference from Petershill, maintaining the firm's strategic autonomy which is vital for investor trust.

NEW YORK--(BUSINESS WIRE)-- Kennedy Lewis Investment Management (“Kennedy Lewis”), a leading opportunistic credit manager, today announced that Petershill at Goldman Sachs Asset Management (“Petershill”) has made a passive, minority investment in the firm.

The transaction will provide Kennedy Lewis with additional resources to further align its interests with clients and accelerate investment in the business, including by continuing to attract best-in-class professionals to the firm. The investment from Petershill will have no impact on Kennedy Lewis’ investment process, management, or day-to-day operations. In conjunction with the investment from Petershill, Azimut Alternative Capital Partners, LLC (“AACP”) will divest its non-controlling, minority equity interest in Kennedy Lewis.

David K. Chene and Darren L. Richman, Co-Founders and Co-Managing Partners of Kennedy Lewis, said, “We are honored to welcome Petershill as a passive investment partner. Their experience and track record of supporting marquee alternative asset managers will be helpful to us as we continue to grow. We would also like to thank the team at AACP for their contributions and the role they played as we built Kennedy Lewis into the firm it is today and also our valued clients for their long-standing trust and support. We see a large and expanding pool of opportunities that are well-suited to our opportunistic, industry-focused approach and will now be even better positioned to seize these opportunities on behalf of our global investor base.”

“Kennedy Lewis is a world-class firm that possesses remarkable depth of expertise in specialized areas of the credit markets that are underserved by traditional lenders and many private credit firms,” said Robert Hamilton Kelly, co-head of Petershill at Goldman Sachs Asset Management. “The firm has distinguished itself through investing in compelling, often complex situations and providing clients with return streams that offer attractive potential returns and diversification from other credit managers, who are often more sponsor focused. We believe they remain strategically positioned to further capitalize on the current market environment and succeed across economic cycles. We look forward to supporting Kennedy Lewis during the next chapter of their growth.”

“Notwithstanding this exit, we are committed to continue growing in the GP Staking landscape as well as in the broader Private Markets space, in the US and globally,” said Giorgio Medda, CEO of Azimut Group. “This transaction demonstrates the potential to exit positions in AACP’s target investment segment to esteemed established GP Stakes buyers. We bid farewell with a sense of gratitude to David, Darren, and the entire Kennedy Lewis team for the exceptional collaboration. They are not only outstanding managers and investors but also remarkable individuals. We extend our best wishes to them as they embark on a new journey with GSAM, a solid and reliable partner, with which we are sure they will be able to reach even more significant objectives in the broader private credit space. Our relationship with Kennedy Lewis however does not end; Azimut’s clients (both in Italy and the US) have invested in KL’s underlying strategies and we are convinced that our strategic and commercial relations will continue also in the future.”

BofA Securities acted as financial advisor and Seward & Kissel LLP acted as legal advisor to Kennedy Lewis. Sidley Austin LLP served as legal advisor to AACP and Kirkland & Ellis served as legal advisor to Goldman Sachs Asset Management.

About Kennedy Lewis

Kennedy Lewis is an alternative credit manager founded in 2017 by David K. Chene and Darren L. Richman with over $14 billion under management across private funds, a business development company, and collateralized loan obligations. The firm seeks to deliver attractive risk adjusted returns for clients by investing across the credit markets through its opportunistic credit, homebuilder finance, core lending and broadly syndicated loan strategies.

About Petershill at Goldman Sachs Asset Management

Goldman Sachs (NYSE: GS) is one of the leading investors in alternatives globally, with over $450 billion in assets and more than 30 years of experience. The business invests in the full spectrum of alternatives including private equity, growth equity, private credit, real estate, infrastructure, hedge funds and sustainability. The alternative investments platform is part of Goldman Sachs Asset Management, which delivers investment and advisory services across public and private markets for the world’s leading institutions, financial advisors and individuals. Goldman Sachs has over $2.8 trillion in assets under supervision globally as of December 31, 2023.

Established in 2007, Petershill partners with leading alternative asset managers and helps to accelerate their strategic development. Petershill’s minority investments seek to support the creation of long-term value by providing strategic capital to enhance employee retention, facilitate business development, buy out legacy equity holders and generate strategic options – while preserving the autonomy and entrepreneurial spirit of these organizations.

About Azimut Group

Azimut is an independent, global group in the asset management, wealth management, investment banking and fintech space, serving private and corporate clients. A public company listed on the Milan Stock Exchange (AZM.IM), the group is a leader in Italy and active in 18 countries around the world, with a focus on emerging markets. The shareholder structure includes around 2,000 managers, employees and financial advisors bound by a shareholders’ agreement that controls ca. 22% of the company. The remaining is free float. The Group comprises various companies active in the sale, management, and distribution of financial and insurance products, with registered offices in Italy, Australia, Brazil, Chile, China (Hong Kong and Shanghai), Egypt, Ireland, Luxembourg, Mexico, Monaco, Portugal, Singapore, Switzerland, Taiwan, Turkey, UAE, and USA. In Italy, Azimut Capital Management SGR sells and manages Italian mutual funds, Italian alternative investment funds, as well as being active in the discretionary management of individual investment portfolios. Furthermore, Azimut Capital Management SGR distributes Group and third-party products in Italy via a network of financial advisors while Azimut Libera Impresa focuses on the alternatives business. The main foreign companies are Azimut Investments SA (founded in Luxembourg in 1999), which manages the multi strategy funds AZ Fund 1 and AZ Multi Asset, and the Irish Azimut Life DAC, which offers life insurance products.

Founded in 2019, Azimut Alternative Capital Partners, LLC is the New York-based GP Stakes Business of Azimut Group. AACP acquires minority equity stakes in private markets firms (e.g. private equity, private credit and real assets) in the lower middle market ($500M - $3B AUM at the time of investment) primarily in North America and Western Europe. More info on www.azimutalternative.us

View source version on businesswire.com: https://www.businesswire.com/news/home/20240402030635/en/

For Kennedy Lewis

Prosek Partners

Josh Clarkson / Mike Geller

jclarkson@prosek.com / mgeller@prosek.com

For Petershill at Goldman Sachs Asset Management

Joseph Stein, Goldman Sachs

+44 207 774 4080

Brunswick Group

Simone Selzer / Sofie Brewis

Tel: +44 207 404 5959

phll@brunswickgroup.com

For Azimut

Viviana Merotto

Tel. +39 338 74 96 248

E-mail: viviana.merotto@azimut.it

Maria Laura Sisti (Esclapon & Co.)

Tel. +39 347 42 82 170

Email: marialaura.sisti@esclapon.it

Source: Kennedy Lewis Investment Management

FAQ

What is the latest investment made in Kennedy Lewis Investment Management?

Petershill at Goldman Sachs Asset Management has made a passive, minority investment in Kennedy Lewis.

Who will divest its non-controlling, minority equity interest in Kennedy Lewis?

Azimut Alternative Capital Partners, will divest its equity interest in Kennedy Lewis.

How will the investment from Petershill impact Kennedy Lewis' operations?

The investment from Petershill will have no impact on Kennedy Lewis' investment process, management, or day-to-day operations.

Which firms acted as legal advisors in the transaction?

Seward & Kissel LLP acted as legal advisor to Kennedy Lewis. Sidley Austin LLP served as legal advisor to AACP, and Kirkland & Ellis served as legal advisor to Goldman Sachs Asset Management.