ATP PEP May Reduce Target Of Next Fund

Danish fund-of-funds manager ATP Private Equity Partners is set to launch its fourth fund of funds by the third quarter, but it is likely the original targeted fund size of €1.5 billion ($2.0 billion) may be brought down to €1 billion due to slow fundraising conditions and fewer opportunities to invest.

ATP PEP manages €6 billion on behalf of the Danish Labour Market Supplementary Pension Scheme, ATP Pension, which is the sole source of money for the most recent ATP PEP fund. Lars Rohde, chief executive of the €81 billion pension fund, recently reported to Reuters, publisher of Buyouts, that the pension fund is in the process of building up its private equity allocation from an actual allocation of around 5 percent to reach a target of 10 percent in the long term. ATP PEP is currently committing to funds via its third vehicle, the €1.5 billion ATP PEP III, which was set up in September 2007 and is 74 percent committed.

Managing partner of ATP PEP, Torben Vangstrup, said it is likely the original targeted fund size of €1.5 billion may be brought down to €1 billion. “As the group has the ambition of launching a fund every two years, €1 billion is more realistic in the current fund raising climate,” he said. “But that may change and we can either ask ATP for an increase in fund size or raise Fund V sooner.” ATP PEP I closed at €1 billion in 2001 and the subsequent two funds both had €1.5 billion to commit.

Founded in 2001, ATP PEP has an 18-strong team with offices in Copenhagen and New York. The firm invests in buyout and venture funds, secondary interests in funds, distressed funds and co-investments in Europe and North America. The team will also consider opportunities in India, Eastern Europe and Australia. Typical fund commitment sizes range from €10 million to €100 million. The typical size of a co-investment is between €5 million to €25 million.

ATP PEP’s strategy is to invest between 65 percent and 75 percent of its money in buyout funds; 5 percent to 15 percent in venture capital funds; 5 percent to 10 percent in secondary and distressed funds; and 0 to 10 percent in co-investments.

Funds in ATP PEP III’s portfolio include a broad range of U.S. and European buyout and venture funds, as well as several emerging market-focused vehicles. They include Advent International VI, Apollo VII, BC Partners VIII, Bessemer Venture Partners VII, Brazos III, Bridgepoint IV, Delphi Ventures VIII, HitecVision V, India Value Fund IV, Lindsay Goldberg I, LS Power II, Mid Europa III, New Leaf Venture Partners II, Odyssey IV, Onset Ventures VI and Waterland IV.