CalPERS backs $300m Monograms’ $300m Mountaintop continuation deal

The California Public Employees’ Retirement System (CalPERS) is among the institutional investors backing a roughly $300m continuation vehicle that will allow private equity firm Monogram Capital Partners to retain ownership of beverage manufacturer Mountaintop Beverage, according to a report by Bloomberg.

The transaction highlights the growing participation of large pension funds in the private equity secondaries market, including continuation vehicles, as institutional investors become more comfortable with structures that allow sponsors to extend their ownership of existing portfolio companies.

Mountaintop Beverage produces shelf-stable beverages for coffee, tea and dairy brands. The company has been transferred into a continuation vehicle that provides additional capital for its growth while allowing investors in Monogram’s second private equity fund to realise a substantial portion of their investment.

Monogram co-founder Jared Stein said the transaction enabled the firm to crystallise a significant return for the fund while replenishing its balance sheet to support further expansion.

The report cites unnamed people familiar with the transaction as revealing that Apollo Global Management’s S3 secondaries business led the continuation vehicle.

Partners Capital and the California Institute of Technology (Caltech), are also participating in the vehicle. The institutions reportedly did not immediately respond to requests for comment.

The transaction was completed at net asset value, with no discount applied, and delivered a four-times return of capital to the limited partners in Monogram’s fund, according to people familiar with the terms.

Monogram focuses on consumer businesses in the lower middle market. The Mountaintop transaction provides the firm with additional capital and time to pursue further growth while delivering liquidity to investors in its earlier fund.