Warburg Pincus yesterday announced that the family office of French businessman Marc Ladreit de Lacharriere “has made an investment resulting in a 5% stake in the private equity firm.”
But this is not a transaction whereby Warburg Pincus will use proceeds for management liquidity or to set a valuation ahead of IPO. Instead, sources say that the deal is actually for a 5% stake in the carried interest stream of both existing and future Warburg Pincus funds (including its new flagship vehicle — Fund XII — which soon will close on around $12 billion). No governance or voting rights in the firm’s management company are included.
The proceeds will be directed largely into Warburg Pincus funds, including to fill a massive $800 million GP commitment to Fund XII.
If this sounds a bit familiar, that may because Warburg Pincus previously struck a similar a similar deal with Merrill Lynch, which expires with the firm’s eleventh flagship fund (the new deal, I’m told, is indefinite).
This transaction represents Lacharriere’s first investment with Warburg Pincus.
A Warburg Pincus spokesman declined comment beyond the press release.