Meet the Middle East’s newest staker of emerging managers

The GP advisory has a 'nine-figure sum' to back up to 80 graduates from its new emerging manager accelerator, managing partner Simon Davies tells PEI.

Katrina Lau - Private Equity News & Analysis

Emerging managers can be an acquired taste for LPs and GP stakes firms alike. Aucta, a Dubai-based GP advisory, has developed it in abundance.

The firm will on 27 January launch a 12-week accelerator programme hosting 20 emerging managers spanning private and public markets, founder and managing partner Simon Davies tells Private Equity International. It plans to run four such programmes each year.

"Particularly for emerging managers, the regulatory climate in UK, Switzerland, US was getting way too burdensome," says Davies. "You had super-bright people, essentially in a situation where they really were not getting the support they needed to set up."

The accelerator is open to pre-launch and existing emerging managers with out a presence in the GCC, provided they are willing to create a local business in the UAE alongside their initial headquarters. The programme will include structured sessions and self-directed work assignments. "We have Singapore, Hong Kong, the US, the UK, Switzerland, Canada; and all of those firms probably have one common denominator, which is they would like to be doing something in GCC and MENA, but are not quite sure what or how," he says. "We've had over a thousand quality applications to the programme for 20 seats and there is very wide diversity. You've got Japanese real estate... all the way through to very traditional Silicon Valley VC."

Upon completion, and subject to Aucta's investment committee, participants may receive working balance sheet capital at the GP level through a convertible loan note, as well as a seven-figure seed commitment for their debut fund. Davies expects 60-75 percent of each cohort to qualify for this capital. "The idea is that our capital offered will not change your world, but they will unlock other LPs seeing you much more favourably and see that you have some support institutionally," he notes.

Family fortunes

Aucta was set up in 2011 as a GP advisory that supports budding founders and fund managers, according to its website. Davies previously founded London-based asset management firm Davies & Co, which was later acquired. He then joined family office Gunner Montagu & Co as chief executive for seven years, his LinkedIn shows.

Aucta already has a nine-figure sum to invest from Davies' own family capital and "a very material Gulf-based family", he says. "It enables us to get to where we're going, and then we will add more later. Over time, we will add other local stakeholders. There are certain sovereign pools of capital which could be ideal to support us."

Aucta warants no single asset class exposure to exceed more than 1-5 percent of total portfolio value, Davies adds, noting that it will be able to make add-on investments into existing managers to balance its allocation. "We are adopting a 'same size' approach to each graduate offered capital with an overlay to manage exposure to any one asset class."

GP stakes strategies appear to be gaining traction in the Gulf region.

Bahrain-based Investcorp currently manages two funds under its GP stakes unit: Investcorp Strategic Capital Partners closed on $800 million in September 2022; its successor had raised $107 million as of September 2024, PEI data shows. ADQ-backed manager Lunate launched a joint venture last year with Blue Owl; Abu Dhabi Catalyst Partners, a joint-venture between Mubadala and Alpha Wave Global, will invest in GPs entering the region.

According to PEls LP Perspectives 2025 Study, roughly half of LPs plan to back emerging managers in the next 12 months. Emerging nanager programmes are becoming increasingly common. California Public Employees' Retirement System, for its part, in 2023 launched its $1 billion Project Mosaic, which committed $500 million each to emerging and diverse manager platforms TPG NEXT and GCM Grosvenor Elevate.

Maryland State Retirement and Pension System in September outlined plans to allocate $250 million to emerging GPs in the next five years.

Part of their appeal lies in the opportunity for strong alignment of interest.

Australia's Aware Super, for example, has a majority bias towards emerging private equity managers because the GP teams often commit a material amount of their personal net worth to the fund alongside LPs, deputy chief investment officer Damien Webb told affiliate title Buyouts in November.

Davies says Aucta's programme aims to address common pain points encountered by emerging GPs on the fundraising trail. "We've seen the pain level over the lot, particularly post-covid, but also pre-covid. This is not going to get better in a hurry, but we happen to be in a region where there are answers."