Dyal, Wafra Set to Buy Minority Stake in Venture Firm NEA

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An investor group led by Neuberger Berman’s Dyal Capital Partners and Kuwait-backed Wafra Inc. is in talks to buy a minority stake in New Enterprise Associates, one of the world’s largest venture capital firms, according to people with knowledge of the matter.

A deal is slated to be completed by year-end, said the people, who asked not to be identified because the talks are private. The stake represents about 15% of NEA, one of the people said. The Silicon Valley firm had been in talks with several potential investors, Bloomberg reported last month.

Spokespeople for NEA and Dyal declined to comment, and a Wafra representative had no immediate comment.

The transaction would echo a move by General Catalyst, which sold a minority stake to Goldman Sachs Group Inc.’s Petershill unit in 2018. Venture firms, like private equity firms, have long been expected to pursue stake sales to raise capital that can be used to reinvest in new vehicles, expand into new strategies or simply give partners a way to partially cash out.

NEA, led by Managing General Partner Scott Sandell, said in March that it raised $3.6 billion for its largest fund yet. The Menlo Park, California-based firm has raised almost $24 billion since it was founded in 1977 by Dick Kramlich, Chuck Newhall and Frank Bonsal.

The firm has backed companies including Salesforce.com Inc., Groupon Inc., Robinhood Markets, Workday Inc. and Gwyneth Paltrow’s Goop Inc. Some 230 of NEA’s more than 500 portfolio companies have pursued initial public offerings, according to its website.

Dyal and Wafra have a history of taking passive, minority stakes in closely held investment firms. Both are backers of TowerBrook Capital Partners and TSG Consumer Partners, and Wafra has previously acquired stakes in firms including Siris Capital Group and Digital Colony.

©2020 Bloomberg L.P.

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