Capital Dynamics Seeks $1B For Seventh-Generation FFs

Capital Dynamics, the Swiss asset manager, has secured, between a first closing and hard circles, an estimated $300 million to $400 million for its seventh-generation fund of funds product. The target is $1 billion.

The product comes in five parts, designed to satisfy a range of tastes. Investors can choose among a diversified U.S. venture capital and buyout pool; a European venture capital pool; a small-cap European buyout pool; a diversified European buyout pool; and an Asia pool. The targets for the five sub-funds are mainly in the $200 million range, with the exception of a $50 million target for the European venture fund.

Capital Dynamics, which manages more than $20 billion on behalf of institutional investors, largely through separate accounts, expects to hold a final closing on the fund of funds in the second half of 2009. That would set the stage for the rollout of an eighth-generation product in early 2010, keeping to the product’s bi-annual timetable.

The asset manager has grown into one the world’s biggest suppliers of private equity dollars, annually committing on behalf of its clients between $5 billion and $7 billion per year to some three dozen funds. Of that tally the firm channels about 55 percent to U.S. firms, including ones that invest outside of the United States; 40 percent to European firms; and 5 percent to other firms operating in Asia and elsewhere. Buyout firms end up securing the vast majority of these commitments.

Among Capital Dynamics separate-account clients are the Greater Manchester County, Lancashire County, the city of Liverpool, Prudential American, and Washington State Investment Board. Through its funds of funds, which have about $3 billion in assets, the firm has backed such buyout groups as The Blackstone Group, Charterhouse Capital Partners, CVC Capital Partners and Fortress Investment Group.