News & ResearchLatest News
December 5, 2023Wafra and the Third Swedish National Pension Fund Announce the Formation of Covalent
AP3 and Wafra form new investment platform to pursue private equity co-investments
New venture combines the deal flow and investment capital of its founders
New York and Stockholm, December , 2023 – The Third Swedish National Pension Fund (“AP3”) and Wafra Inc. (“Wafra”) today announced the formation of an investment platform called Covalent. The platform is focused on pursuing a new approach to private equity co-investing, harnessing the capabilities, networks and experience of a small number of large, forward-thinking, global asset owners.
Covalent’s founding members believe that the prevailing approaches to private equity co-investment are ripe for positive transformation. By combining the resources and relationships of two of the world’s premier institutional investors, the founders of Covalent believe they can build a differentiated, fully aligned and agile source of capital.
Covalent will build upon the success of Capital Constellation, an innovative collaboration among large asset owners launched by Wafra in 2018 to identify and support new and promising asset management firms. Like Capital Constellation, Covalent is intended to better align all parts of the private markets value chain and allow like-minded asset owners to achieve together what they could not alone.
Key highlights of the Covalent platform include:
- Capitalization and market opportunity: Covalent will be initially capitalized with $1.05 billion and focus on mid-market buyouts and growth equity investments primarily in North America and Europe.
- Supporting asset managers: Covalent will actively support and partner with skilled and specialized private market asset managers to fund their investments and amplify their success.
- Peer-to-peer collaboration: Covalent’s founders believe they can jointly benefit from the complementary deal flow, scaled resources, and relevant data and intellectual capital supplied by working closely with targeted institutional investors across multiple continents.
- Differentiated, high quality deal flow: Covalent seeks to benefit from access to investment opportunities that include investments led directly by the Wafra investment team; investments alongside the 27 asset managers with whom Wafra has formed strategic investment relationships; and investments alongside managers that the Covalent founders back as Limited Partners.
Commenting on the launch of Covalent, Henrik Nordlander, Head of Private Equity at AP3 said, “For AP3 this is a way to accomplish cost efficient, sustainable asset management as we strive to be a world class investor. Covalent is further evidence that strategic partnerships among asset owners can support our commitment to generating superior net returns for our beneficiaries.”
Adel Alderbas, Wafra’s Chief Investment Officer, noted, “We remain dedicated to the belief that robust partnership with talented investment teams will allow us to continue to generate lasting benefits for both asset owners and asset managers.”
Steve Moseley, Managing Director at Wafra added, “By deploying flexible, patient capital and collaborating with highly skilled investment sponsors, we expect to continue to construct high quality portfolios of carefully selected private equity investments in targeted sectors alongside top tier investment firms.”
Lil Laras Lindgren, Head of Communications
AP3, Third Swedish national Pension Fund
Covalent is a collaborative asset owner platform with significant co-investment capital, expertise, and relationships with some of the world’s premier institutional investors. Covalent’s mission is to develop and institutionalize a differentiated approach to co-investment opportunities that harnesses the power of a strong business model underpinned by collaboration, innovation, and execution, to deliver attractive risk-adjusted returns to its investors.
About AP3 – Third Swedish National Pension Fund
AP3 is one of five funds that manage capital on behalf of the Swedish state pension system. At 30 June 2022 AP3 had SEK 491,5 billion (US$46.5 billion) under management. AP3 is tasked by Parliament with generating maximum possible benefit for the state pension system by managing its fund capital responsibly and delivering strong investment returns at a low level of risk.
Wafra is a global alternative investment manager with over $30 billion of assets under management across a range of alternative assets, including real assets, real estate, and strategic partnerships. By providing flexible and accretive capital solutions and focusing on long-term partnerships, Wafra aligns and partners with high quality asset owners, companies, and management teams. Headquartered in New York, Wafra has additional offices in London, Kuwait and Bermuda.