(Bloomberg) -- Wafra Inc., the alternative-asset manager that invests on behalf of Kuwait, acquired a minority stake in private equity firm Oak Hill Capital from Jefferies Financial Group Inc.
“We think they are doing something differentiated in the middle market,” Wafra managing director Gustavo Cardenas, who helps lead the firms investments in both mature and growing firms, said in an interview. Oak Hill has been a “great provider” of co-investment opportunities to its limited partners, he said.
Oak Hill’s fourth and fifth funds delivered internal rates of return of 28.3% and 28.5% as of June 30, according to PitchBook data. Fund investors include the Ohio Public Employees Retirement System, Canada Pension Plan Investment Board and Minnesota State Board of Investment, according to data compiled by Bloomberg.
Jefferies said in a securities filing on Friday that it realized about $175 million in net revenue from the sale of its interest in Oak Hill and certain affiliates. It had owned the 15% stake since 2019.
Wafra has been acquiring minority stakes in asset managers since 2012, starting with Stone Point Capital, Cardenas said.
“We have the ability to be a strategic rather than just a financial partner,” Wafra senior managing director Daniel Adamson said.
Over the past decade, Wafra and backers of its affiliate, Capital Constellation, have committed $5 billion to dozens of firms that count it as a co-owner. Wafra’s partners, including Alaska Permanent Fund Corp., Railpen and Sweden’s AP3, have made follow-on investments in excess of $8 billion, Adamson said.
“If we’re not tripling or quadrupling that number in the years ahead, then we’re not doing our job,” he said.
Oak Hill traces its roots to Texas billionaire Robert M. Bass’s family office, and has offices in New York, Connecticut and California. It is led by managing partners Tyler Wolfram, Brian Cherry and Steve Puccinelli.
“Partnership is a core tenet underlying our firm, and in Wafra we found an aligned partner with a demonstrated ability to collaborate with investment firms such as ours to accelerate our vision for Oak Hill, our investors and our stakeholders,” they said in an emailed statement.
Read more: Jefferies Is Said to Near Deal to Sell Oak Hill Stake to Wafra
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