Donald Trump’s pick for the US department of education secretary, Betsy DeVos, holds more than $180 million in private market fund stakes, which she is expected to sell on the secondaries market to address any potential conflict of interest.
According to a disclosure report handed to the Department of Education's Ethics Agency official by the US Office of Government Ethics, the family trust vehicles of Betsy DeVos have in excess of $180 million worth of stakes in a range of private market funds with particularly well-developed relationships with a handful of firms, including Partners Group, New York firm AEA Investors and Asia-based PineBridge Investments.
In the disclosure document, DeVos said she will divest her holdings within 90 days of her confirmation as education secretary. The papers do not provide exact details of DeVos's investments, only a size range, and it is not clear when the stakes were valued.
The largest single fund investments held by DeVos are two $25million-$50 million stakes in AEA Investors Fund V, a North America and Europe-focused $2.4 billion 2012 vintage fund, and Cortec Group Fund V, a $600 million US buyout vehicle closed in 2011. According to California State Teachers' Retirement System's private equity portfolio performance information, Cortec V is one of the top performing funds in its portfolio, recording an internal rate of return of 46.76 percent as of 31 March 2016, although it is not clear whether this is gross or net.
Other significant stakes held by DeVos include $5 million to $25 million stakes in AEA Europe Fund II, AEA Middle Market Debt Fund, Coller International Partners VI, Dyal Capital Partners III Co-Invest Horizon and a $1 million to $5 million stake in Partners Group Client Access 19.
Client Access 19 bought a direct stake in Systems Maintenance Services, a North Carolina-based IT maintenance firm Partners acquired from Thomas H Lee Partners in August 2016, according to the document.
The client access vehicles are set up to make direct investments in companies. DeVos also owns stakes in a number of other Partners client access programmes run by Partners as well as funds including Partners Group Secondary 2011, Partners Group Secondary 2015 and Partners Group Direct Equity 2016.
DeVos also owns stakes in other private market funds including real estate, mezzanine, credit, debit and collateralised loan obligation behicles including more than $1 million in Goldman Sachs Real Estate Mezzanine Partners, up to $5 million in Vista Credit Opportunities Fund II and up to $25 million in AEA Middle Market Debt Fund II.
The private equity firm backed most frequently by DeVos is PineBridge Investments, which majority owned by Hong Kong investment group Pacific Century Group. DeVos currently holds stakes in seven PineBridge funds, more than any other firm, including PineBridge Secondary Partners, PineBridge New Europe Partners II, PineBridge PEP IV Secondary, PineBridge Latin America and PineBridge Asia Partners II.
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