Constellation Growth Capital

Instead of buying companies directly, Constellation Growth Capital buys stakes in the firms that manage money. A joint venture spanning several countries, it takes structured positions in alternative investment managers with growth in mind, and it calls its approach a private equity strategy that supplies growth capital to private alternative asset managers.

A coalition of asset owners

What sets it apart is who stands behind it. The platform is a collaborative network of institutional asset owners, with Wafra Inc. providing the investment management services. The original owners named on the older site are Railpen, Kuwait's Public Institution for Social Security, the Alaska Permanent Fund Corporation and the New York State Common Retirement Fund. The group has since widened to include other owners on three continents, among them Kuwait Investment Authority, Orange County Employees Retirement System, the Third Swedish National Pension Fund and the Canada Pension Plan Investment Board. Together these asset owners have a large combined presence, and the platform says it uses it to work with talented investment teams on arrangements that benefit both the owners and the managers.

What it offers managers

Constellation says its structured investments aim to provide financial solutions and strategic value to alternative asset management firms while creating several sources of value for the asset owners. It positions itself as a resource-rich partner that can help a manager implement its plans as well as fund them. By combining the viewpoints of institutional investors and business builders, it aims to assemble a diversified portfolio of ownership interests in investment firms that it expects to last. The platform points to a long record of combining ownership stakes in managers with curated exposure to a variety of underlying assets.

Managers in its network

The strategic partner relationships listed on the site cover many styles of investing:

• A London private capital firm offering flexible structured solutions to middle-market and family-owned companies in Western Europe.
• Ara Partners, in industrial and renewable private equity.
• Astra Capital Management, focused on communications and technology services.
• Avista Capital Partners, in healthcare private equity.
• Broad Sky Partners, in business services and consumer companies.
• Motive Partners, in financial technology.
• Pollen Street Capital, in financial and business services and specialty lending.
• Post Road Group, in corporate credit, real estate credit and preferred equity.

Each is described with a one-line strategy label, such as healthcare or fintech private equity, so an asset manager can see where it would sit in the group.

Constellation Growth Capital is a global joint venture that makes structured, growth-oriented investments in alternative investment management firms. It works as a private equity strategy. Wafra Inc. provides investment management services for the platform.

What Constellation Growth Capital does

• Growth capital: funding for private alternative asset managers.
• Ownership stakes: investments that combine holdings in managers with exposure to their underlying assets.
• Structured solutions: arrangements aimed at adding strategic value for the managers.
• Asset owner network: a collaborative group of institutional investors across three continents.

Who it serves

Private alternative asset management firms. Its owners are public pension and sovereign investors, among them Railpen, the Alaska Permanent Fund Corporation, a New York state pension fund and the Kuwaiti social security institution.

Key facts

• Investment manager: Wafra Inc.
• Other participants: a Kuwaiti sovereign investor, a Californian county pension system and a Swedish national pension buffer fund
• Strategy: private equity