LONDON: Petershill Partners has completed the sale of most of its stake in General Catalyst for $726 million, reflecting a 62% premium to its $447 million carrying value as of June 2024. This sale is part of a capital restructuring involving General Catalyst and external investors.
Since Petershill’s 2018 investment, General Catalyst has evolved from a venture capital firm to a global investment and transformation company, causing a misalignment with Petershill’s strategy. The sale includes Petershill’s interest in General Catalyst’s management fee earnings (FRE) and future performance-related earnings (PRE).
Petershill retains rights to $137 million of PRE and balance sheet assets. The sale proceeds, in the form of interest-bearing loan notes, will see $207 million repaid by March 2025, with the remaining $519 million repaid over time at an initial 10% annual interest rate.
The deal impacts Petershill’s 2025 distributable earnings by reducing Partner Fee-related earnings and FRE margin, but is offset by interest income from the loan notes. The company plans to reinvest the proceeds and declare a special dividend of 14 cents per share.
Co-Heads Ali Raissi-Dehkordy and Robert Hamilton Kelly of Petershill Business within Goldman Sachs Asset & Wealth Management praised General Catalyst and expressed optimism about redeploying sale proceeds into new investments for shareholders.