Evercore is to transfer the control of its Mexican private equity business Evercore Mexico Capital Partners (EMCP) to a new entity formed by the existing principals of the business.
Under the plan, the EMCP team, led by Alfredo Castellanos, has formed a new entity, Glisco Partners, which will assume all responsibility for management of the existing EMCP funds, which currently manage USD266 million of invested capital.
Dr Pedro Aspe, the chairman of Evercore Partners Mexico, will continue to serve on the investment committee for the EMCP funds.
As consideration for the transfer of ownership, Evercore will receive a fixed percentage of the management fees earned by Glisco for a period of up to 10 years, as well as a portion of the carried interest in the next two successor funds. Evercore will commit to invest capital in those successor funds consistent with the level of carried interest it owns and will retain its carried interest and its capital interests in the existing EMCP funds, which have an aggregate carrying value of USD12.4 million as of 31 March 2016.
A transition services agreement providing operational support to Glisco will be in place for up to 18 months, while completion of the transaction, which is subject to consent by the limited partner advisory committee of the EMCP funds and regulatory approval in Mexico, is expected to occur before the end of 2016.
Ralph Schlosstein, president and chief executive officer of Evercore, says: "This transaction represents another step forward in our strategy of continuing to invest in our independent, unconflicted investment banking businesses while positioning our investment management affiliates to continue to grow and develop, sustaining exceptional unconflicted service to their investor clients. We are committed to supporting Alfredo and his colleagues as they launch Glisco as an independent company and will remain as significant investors in their funds for many years to come."
Castellanos says: "We have worked hard for the past 13 years to provide investors with unique high growth investment opportunities in Mexico, working closely with our colleagues at Evercore. We are excited to take the business to the next level, having received the highly valued support of our limited partner investors and Evercore. In our future funds we expect to maintain the same strategy as our previous funds. We will continue to work diligently to maintain our investors' trust in creating value and strong returns in the exciting chapter ahead."
Aspe says: "I am very pleased with the growth attained by the private equity business. I am committed to supporting EMCP's transition to an independent company and continuing to serve the funds' limited partner investors as a member of the investment committee."
