by Tom Stabile

Another secondaries player has opted to sell a slice of itself, with Kline Hill Partners securing backing from TA Associates – the 19th largest private equity manager, according to the PEI 300.
The partnership will allow small-deal secondaries firm Kline Hill to scale its specialisation, leveraging TA’s asset and wealth management experience, according to a statement.

TA reached out to Kline Hill to discuss an investment, Kline Hill managing partner Mike Bego told Secondaries Investor.

“We were really very excited about working with them because of the investment culture, their presence in the industry and the deep level of performance that they’ve had,” Bego said. “TA has invested in 35 different asset management companies before Kline Hill, so they understand the industry deeply.”

Kline Hill will remain independent from TA, which Bego said was important for the firm.

Unlike other GP stakes firms and managers acquiring secondaries players, TA won’t gain exposure to any of Kline Hill’s carried interest, Bego said. Typically, firms acquire 25-50 percent of carry in a transaction, he added.

“With TA, we found a great opportunity where they aren’t taking a majority,” Bego said. “Unlike the [GP] stakes firms, TA really provides a lot of value. Most stake transactions are purely financial, and we see this as much more strategic.”

While the firm hadn’t intended to sell a stake, it has had more than 50 suitors that have reached out to discuss potential investments since 2017, following the close of Kline Hill’s first fund close.

“TA has been at the forefront of supporting growth and innovation in the asset management and wealth management markets for several decades,” TA managing director Roy Burns said in the statement. “Kline Hill stands out with its tailored sourcing model, compelling solutions and longstanding leadership in the small-deal secondary market.”

Bego said Kline Hill will be working with Burns and TA vice-president Rodrigo Bassit, and he’s “excited to have them integrating with us from a strategic perspective and get their insights and help as we think through specific decisions”.

TA is understood to be using one of its main funds to make the investment, a source familiar with the matter told Secondaries Investor. With no carry factored in, Kline Hill has been valued at around $500 million, the source added. Kline Hill declined to comment on its specifics relating to TA as well as its valuation.

Morgan Stanley served as financial adviser to Kline Hill, the statement said. The transaction is expected to close in the second quarter of this year.

Kline Hill has raised five funds since it was founded in 2015, representing over $5.4 billion in assets under management, according to the statement. In 2024, the firm signed over 160 deals and has signed over 625 transactions since inception.

Kline Hill joins Coller Capital, which sold an interest in its firm to GP stakes specialist Hunter Point Capital in 2023, while Banner Ridge Partners sold a stake to Investcorp’s Strategic Capital Group in 2024.

Other secondaries firms have opted to consolidate into larger asset managers with Ares Management, Franklin Templeton, CVC Capital Partners, Brookfield Asset Management and AXA Group’s AXA Investment Managers all purchasing secondaries players in recent years.