Info on Banner Ridge Partners
Hi - was wondering if anyone had any insight on Banner Ridge - e.g. fund performance, culture, exit opps?
I've heard the fund mostly invests in distressed/special situations, but could be wrong. Thanks!
They do secondaries - focused on distressed/special sits funds.
Performance has been very good. Tony Cusano has a good track record from his time at Siguler Guff. Have heard that culture is intense.
Interested in learning more details as well
No direct investing. Only secondaries. Good performance
Did DD work on them as an LP, decided to commit in the end. As the comments above said, they focus mostly on acquiring LP interests of distressed and special situations funds in the US. Think the likes of Oaktree, Ares, Cerberus, GoldenTree, Anchorage, and so on. The idea is to get into LP interests that are late into their fund life / tail-end of their fund life so that they can negotiate larger discounts to NAV and retain upside to post reorg equity after the managers have done the hard work of restructuring underlying companies.
Performance is stellar, vintage-leading IRRs with very strong TVPIs. They use the same tricks that all the top secondary players (Hollyport, BEX, HarbourVest for large-cap) do, with extensive credit lines to delay capital calls and extensive recycling of invested capital, but because of greater underlying credit exposure for Banner Ridge, IRRs are higher.
They have everything that you want in a secondaries manager for outperformance - information, access and pricing. Because they're one of the few major players in the market actually willing and able to do DD on these distressed assets that are tough to do DD on, they can negotiate good pricing and are often the first call by managers if any LP wishes to sell their LP interest. Lots of distressed managers are also quite touchy when it comes to giving out info on their funds and whitelisting secondary buyers they are not familiar with, and Banner Ridge is one of the few secondary players with good access.
Team has strong underwriting abilities, with Tony Cusano holding most of the sourcing relationships. So he's the clear key man there. Culture is intense and pay is around market median, but they do allocate carry to high-performing Analysts/Associates. It's a pretty decent amount too for juniors, and I'd argue carry at Banner Ridge is far more tangible because they generate DPI very very quickly. Their 2019 vintage fund is at 1.8x net TVPI and 0.8x DPI, which is absolutely insane for even a secondaries fund.
Exit opps wise, they operate in an extremely niche market even for secondaries - they don't do buyout/growth/venture assets which consists of the bulk of the secondary market, so there is a slight risk there that you don't get enough exposure. But top-tier performance and potential upside from carry, if you are willing to stay for long it could work out well as Banner Ridge scales to be THE distressed secondary player on the market
Amazing comment - super helpful thank you so much!
Super old thread but curious if your view on Banner Ridge as an LP has changed at all today. Looking at them as an LP currently
Not OP but in an LP seat. We passed on BR this time around, funds have gotten way too big way too fast. Sold a portion of the GP as well which IMO was just the founder cashing out. They also added a LMM FoF and co-investment fund which have nothing to do with credit/secondaries. Just smells like yet another firm where the best returns are behind them but they'll still raise a ton from LPs who are paid to invest in funds that crushed 8 years ago for job security purposes.
Anyone currently interviewing there?
-incresibly sweaty / lots of firing at junior levels if they don't fit within the grind culture
-returns are mostly due to significant leverage and credit line
-aggressive / shrewd name in industry
What are hours like?
8-8 minimum
Did an LP type of deal with us (fund investment/co-invest type deal) had exposure to some of the partners and thought that they were quite smart and shrewd investors. Had some good conversations with the partners away from just work related topics.
I've spoken with these folks as well. Highly intelligent and strong performing group. They seem to have done well for themselves and have a lot of potential moving forwards.
Know a few guys that work here. Great people and they have grown quickly. I’m not too familiar with the secondaries space as I’m in traditional buyout, but this seems like a good place to learn given the experience of the seniors.
……
Lol there aren't economics. The two partners take 100% apart from Investcorp.
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