US advisory firm Probitas Partners plans to open offices in Asia and the Middle East within the next few months, PEO has learned.
Michael Hoffman, the firm’s San Francisco-based co-founder, confirmed that Probitas is currently in discussions with candidates to lead each office. Hoffman declined to specify the cities in Asia and the Middle East in which Probitas will establish beachheads.
Though Probitas has offices in San Francisco, New York and London, Hoffman notes that Asia and the Middle East are clearly areas where the firm needs to expand its presence. It needs dedicated staff in the region, he says, “to provide enhanced, on the ground service in placement, liquidity management and portfolio management to a growing base of important investors there, including sovereign wealth funds and others who we continue to do more and more work with as the private equity and hard asset investor markets continue to expand”.
This is particularly relevant as the slowing of exits and recapitalisations that typically result in distributions for limited partners – coupled with equity market volatility affecting other asset classes and ultimately an overall portfolio’s denominator – means many large institutional investors with mature private equity programmes will suddenly find their programmes over-weighted.
“The go-to accounts predominantly in the US and the larger accounts in Europe are shut down for the time being because of the allocation issue and for the largest funds, or any fund over $1 billion, if you’re seeking expansion of the prior capital base or even maintenance of the prior capital base I think you’re going to inherently have people traveling to Australia, or to the Middle East, or to Asia to try to backfill some of those LP positions,” Hoffman recently told sister publication Private Equity International.
Probitas was founded in 2001 by Hoffman and Greg Hausler. Funds it recently raised include MidOcean Partners’ third middle-market buyout fund, which closed on $1.3 billion in June 2007; Boston Ventures’ seventh middle-market media fund, which closed on $435 million in December; and Marlin Equity Partners’ second special situations fund, which closed in November on $300 million.