Another Listed F-o-F Suspends Investments

Swiss listed private equity fund-of-funds Absolute Private Equity has become the latest European listed vehicle to cease new commitments, and it doesn’t plan to re-start until it sees a significant improvement in its share price in relation to its net asset value. The fund manager said it would not be making any new commitments for 2010.

Last year saw a wave of listed funds of funds in Europe deciding to either temporarily suspend new fund commitments or actually down business activities. According to research from RBS Global Banking & Markets, total net assets for those funds has hit an estimated £4.1 billion ($6.4 billion). Many of these listed fund-of-funds are big backers of U.S. buyout and venture funds.

Reasons for the suspensions vary, but most say they need to reduce their unfunded commitments and return capital to shareholders before committing to any new funds. Among those to have temporarily suspended new commitments are Castle Private Equity, F&C Private Equity Trust, Pantheon International Participations, Princess Private Equity, Standard Life European Private Equity Trust and SVG Capital—see accompanying table. (Managers of Castle Private Equity and Standard Life European are both expected to resume new fund commitments later in 2010.) Those that have permanently suspended commitments include APEN and ShaPE Capital.

The latest vehicle to announce a suspension of commitments, Zurich-based Absolute Private Equity, primarily invests in US, European and other international buyout and venture capital funds. As of June 30, 2009, Absolute Private Equity had capital commitments totaling $1.4 billion, of which 75.4 percent had been funded. Distributions totaled $753.8 million. As of March 31, 2009, the portfolio held 498 investments through its underlying funds. Funds in the portfolio include Apax Europe VII, Blackstone Capital Partners IV, Blackstone Capital Partners V, DLJ Venture Partners II, Providence Equity Partners V, Terra firma Capital Partners III, TPG Biotechnology Partners III and TPG Partners V.