05/05/2010

Secondary Offering to Divide MJX Portfolio

MJX Private Equity is shopping a large chunk of its investment portfolio, in what could amount to a shift in the firm's strategy.

The secondary-market offering puts some $200 million of limited-partnership interests in play. It represents a majority of MJX Private Equity's investments in U.S.-focused funds, encompassing commitments to an estimated 20 private equity vehicles that are an average of 80% drawn down.

Overall, the portfolio accounts for about half of MJX Private Equity's holdings. Much of the rest is made up of private equity funds in Asia, and the New York operation wants to make those vehicles its core focus going forward. It has already been putting much of its effort into investing in China-focused vehicles on behalf of its clients, who are mainly wealthy individuals and institutions in the U.S.

Still, a move by MJX Private Equity to devote so much of its attention to Asia in the near term would mark a turning point for the firm. There's a buzz that the shop could put together a fund of funds that would invest solely in such vehicles.

Last year, it was marketing a fund of funds concentrating on media-company pools in India.

As for the secondary-market offering, a recent uptick in the values of such portfolios played a role in the timing of the move. Many secondary buyers are willing to pay 20% more than they were last year, thanks in part to soaring net asset values among their targeted funds. Some have boosted their offers by even greater amounts, to levels approaching par. Stock-market gains have also helped embolden bidders.

Other sellers that have been lured into the market by rising prices include Bank of America, Lloyds Banking and RBS, each of which has completed a recent sale.

MJX Private Equity, headed by Tom Darling and Robert Sillerman, is a unit of family-office advisor MJX Capital.