– Petershill Partners has sold the majority of its stake in General Catalyst as part of a capital restructuring involving external investors, with total nominal consideration of US$726 million, a 62% premium to the US$447 million carrying value as of 30 June 2024.
– Since its initial investment in 2018, General Catalyst has transitioned from a venture capital firm to a global investment and transformation company, leading to a reduced alignment with Petershill Partners’ investment strategy.
– Assets sold include management fee earnings (FRE) and future performance-related earnings (PRE), while Petershill Partners retains rights to PRE and balance sheet assets valued at US$137 million as of 30 June 2024.
– The US$726 million consideration will be paid via interest-bearing loan notes, with US$207 million expected to be repaid in cash by 31 March 2025 and the remaining US$519 million repaid over time at an initial interest rate of 10% per annum.
– The transaction represents 21% of Petershill Partners’ market capitalisation, based on the closing share price on 15 January 2025, and reduces 2025 distributable earnings by approximately 9%.
– The sale highlights Petershill Partners’ value creation model, achieving a blended discount rate of approximately 11% on exit compared to 17% at the 30 June 2024 holding value.
– Including this disposal, 2024 aggregate nominal consideration from sales of stakes in partner firms totals US$1,301 million, a 40% premium to the US$930 million carrying value.
– The Board plans to retain most net proceeds for new investments and declare a special dividend of 14.0 cents (USD) per share, equivalent to US$151 million, with timing details to follow.
– Ali Raissi-Dehkordy and Robert Hamilton Kelly, Co-Heads of the Petershill Business at Goldman Sachs Asset & Wealth Management, praised General Catalyst’s success and confirmed plans to redeploy sale proceeds into opportunities offering attractive future returns.
