Patrick holds a bachelor in Modern History and a Master in Dutch private law from the State University of Utrecht and a Master in International tax law from the University of Amsterdam. After his graduation he worked for 12 years in private practice as an attorney-at-law with Loyens&Loeff (and its predecessors Loeff& Van der Ploeg and Loeff Claeys Verbeke) and Steins Bisschop Meijburg & Co focusing on M&A and corporate litigation. During his time at Loeff Claeys Verbeke he spent three years in Jakarta at Ali Budiardjo Reksodiputro, a former associated office of Loeff Claeys Verbeke, working predominantly on foreign investment related matters, joint ventures and project finance. Patrick is a member of the Dutch Association of Company lawyers and registered as an attorney-at-law with the Dutch Bar Association.
At AlpInvest, Patrick focuses on supporting the Amsterdam and Hong Kong based primary-, secondary and co-investment teams with making new commitments both in Europe and Asia by providing all required assistance in relation thereto. This means closely working together with a variety of other teams within AlpInvest like the compliance team, portfolio&risk, tax and investment accounting as well as outside legal counsel. Can you tell us more about the company you work for? What does it stand for and what are its main activities?
AlpInvest is an alternative investment fund manager holding an AIFMD-license with the AFM in The Netherlands and is registered as a US investment adviser with the SEC in the US. AlpInvest is a large global private equity investor, with nearly $64 billion of assets under management, of which over $48 billion is associated with primary fund commitments and secondary purchases as of June 30, 2021.
The Firm provides investment advisory services to investment funds and customized separately managed accounts. AlpInvest was established by two large Dutch pension funds to provide a separate platform for their respective private equity investment programs and has been investing in private equity since 2000. In 2011, AlpInvest was acquired by The Carlyle Group (“Carlyle”) to offer investors broader-based investment management services in private equity which complement Carlyle’s product set. AlpInvest is wholly-owned by Carlyle, one of the world’s largest and most diversified multi-product global investment firms, and listed at the Nasdaq.
AlpInvest is the private equity arm of Carlyle’s Global Investment Solutions business segment. AlpInvest’s activities cover a broad range of private equity investing, including primary fund commitments, secondary purchases, and co-investments. AlpInvest’s investments span the full spectrum of private equity: buyouts, venture capital, growth capital, natural resources, mezzanine and distressed. AlpInvest manages the private equity investments for several large pension funds and a broad range of institutional investors globally across North America, Europe, Asia, South America, the Middle East, and Africa. AlpInvest has invested in over 300 general partners across over 760 funds.
The Legal team
The legal/tax team ‘per se’ in Amsterdam has three members. It works closely together with the senior legal counsel based in New York and the compliance team based in Amsterdam and New York. The team is Amsterdam is supported by two executive assistants who help out on many more administrative related items that need to be handled as well.
Given the magnitude of transactions that is being handled on an annual basis, the Amsterdam legal team works closely together with a dedicated team of lawyers of Macfarlanes in London and Ropes&Gray in Hong Kong. By using checklists for our primary and co-transactions AlpInvest has developed a format to monitor the legal terms that are negotiated on each primary- and co-investment transaction. The legal team needs to make sure that all the key legal issues that AlpInvest focuses on when making a primary-, secondary or co-investment are properly identified, weighed and negotiated. In the end each transaction needs to strike a good balance between the economic interests of the clients that AlpInvest represents in relation to the investment mandates that participate in a particular deal versus relevant legal and compliance requirements and bearing in mind the competitive environment AlpInvest is active in.
Apart from ongoing transaction the legal team focuses on any legal issues that may arise in relation to the existing investment portfolio of AlpInvest and providing advice – where needed – in relation to any matters concerning AlpInvest and its Hong Kong affiliate. Hot topics very much are the growing compliance burden in terms of KYC and AML requirements that need to be met in relation to the existing portfolio and in regard to new investments to be entered into and – as always – time pressure in getting things done on time. In addition, quite some time and effort is spent on responsible investment related matters. Responsible investment (RI) is an integral part of the AlpInvest organization and we have been a signatory of the Principles for Responsible Investment (PRI) since 2009. In 2021, AlpInvest secured an ESG-linked syndicated subscription facility linked for its AlpInvest Co-Investment Fund VIII, which AlpInvest believes is the first of its kind for a PE co-investment fund. ESG-linked financings offer the opportunity to gain an interest margin discount if certain ESG performance indicators are met.
They can be effective tools to further enhance sustainability programs. The facility’s KPIs cover AlpInvest’s responsible investment practices in the investment process, engagement activity and transparency.
The team at AlpInvest generally is very diverse as we have more than 22 nationalities working at AlpInvest in Amsterdam. My colleague is a female lawyer, originating from the Ukraine. Both at AlpInvest and at The Carlyle Group there is a great focus on diversity, equity and inclusion (DEI). DEI is a key priority for the global AlpInvest organization.
Challenges
The biggest challenge I face as a GC is keeping proper oversight over everything that is happening at AlpInvest and keeping abreast with new rules and regulations. AlpInvest is constantly onboarding new investors which means that they will need to participate in the investment strategy they committed to – primary, co- and secondary, as applicable – as soon as possible. The legal department needs to be ‘on the ball’ all the time in making sure that appropriate flexibility is built into the legal documentation to bring in new investors, making sure that outside counsel is fully and timely kept up to breast to make sure that such new investor(s) will be able to pass KYC/AML related requirements. In addition, the legal team needs to be attentive to potential conflicts of interest that may arise. As transactions get more and more complex, where investment teams in New York, London, Hong Kong and Amsterdam may work together on an investment opportunity, it is a challenge to keep track and make sure that the legal does not miss out on obtaining f.e. any required LP or LPAC consents on time or making sure that any regulatory requirements applicable to the jurisdiction concerned are timely met. It is essential to have all the relevant information available – both internally as well as externally – to be able to properly advise the various deal teams in an environment that is highly competitive and where rules and regulations are constantly changing. For the legal team, the increasing burden created by ongoing KYC/AML requirements in particular Europe and Asia is a big challenge and quite time consuming. We are working on some initiatives now trying to reduce this burden to free up time for all the other work
AlpInvest aims to be innovative and at the forefront of developing new strategies and structures. One of our newer investment strategies involves what we call “strategic capital” secondaries which is flexible portfolio financing for PE funds, GPs and LPs. This brings a whole range of new legal issues that the legal team needs to take on-board when negotiating these kind of transactions with the help of outside counsel.
M&A challenges for GCs
The M&A environment has very much changed over the past few years in the sense that the market has grown tremendously. At AlpInvest, we seek to leverage the relationships we strike with the general partners of private equity funds we have committed capital to. These general partners bring us a continuous deal flow in terms of co-investments and potential secondary investments. Due to the growth in the market, the level of standardization, in particular at large buy-out firms like KKR, CVC, Blackstone, has increased reducing at the same time the ability to negotiate certain preferential treatment of AlpInvest. To partially mitigate economic pressures when investing alongside the top tier private equity funds, AlpInvest over the past years has very much focused on building relationships with and making co-investments alongside a range of Mid Market Funds. With the deals becoming bigger and bigger the relative ‘ticket size’ and thereby the leverage of AlpInvest in negotiating terms and conditions is reduced which sometimes is a bit frustrating. So, over the past few years with the growing importance of public auctions, the biggest challenge is to avoid spending resources on deals that may not ‘fly’ and being able to ‘jump in’ swiftly once the ‘green light’ is there. On the positive side, we also see an increase in multi-jurisdictional transactions which are complex but fun to do. The big challenge in these kind of deals obviously is making sure that you get the proper local advice. Time pressure to get the deal done is the biggest challenge.
For GC’s it is important to make sure that third-party legal costs are properly managed and contained and that deal teams feel that they get proper advice that is to the point and no waste of time and money. Making sure that you have the best legal team available for each transaction is ‘key’ but also being realistic and being prepared to spend time and money on new additions to the team to assure that the deal teams are serviced properly.
Activities outside of work
I am very enthusiastic about Bordeaux wine and an active member of the “Commanderie de Bordeaux” in The Netherlands. Apart from that I am a member of the Order of Malta, a charity organization in The Netherlands, and served on its board for a few years. I play some golf from time to time and love to walk with out two Welsh Corgi’s. I am fond of international travel, in particular to Asia, but that has been a while. I love to spend my time with my family having a wife and two grown up daughters, one studying in Amsterdam and the other one in Groningen. To the extent I have any free time available, I like to spend time with friends and read some history books, in particular on international politics.
