Coller aims for record secondary fund

In two closes in mid-August, Coller Capital raised about $1.3 billion for Coller International Partners V, a dedicated secondary fund that’s targeted at $3.75 billion, according to documents filed with the Securities and Exchange Commission. If it reaches its goal, the London-based firm would set a record for fund size in the secondary market, eclipsing the recently closed Lexington Capital Partners VI, which New York’s Lexington Partners closed with $3 billion in commitments.

Coller Capital could decide to boost its cap and take in more than its goal. The firm did that with fund IV, which was targeted at $1.5 billion and wound up setting a secondary fund-raising record at the time when it closed with $2.6 billion.

Coller’s limited partners include the California Public Employees’ Retirement System (CalPERS), CPP Investment Board, the State of Michigan Department of Treasury, Dublin-based Nortrust Nominees and Abu Dhabi-based Procific.

According to performance data from CalPERS, Coller’s previous fund has returned 28.4% and has a return multiple of 1.3x, while its two predecessor funds have generated net IRRs of 16% and 23.5%, respectively.

The enthusiasm for secondary deals has translated into more fund-raising in the space. In addition to the two outsized efforts from Coller and Lexington, New York-based Lehman Brothers recently closed on its inaugural secondary fund, Lehman Brothers Secondary Opportunity Fund, with $800 million in commitments. Also, Simsbury, Conn.-based Landmark Partners has raised about $1 billion for Landmark Equity Partners XIII. AIG, Pantheon Ventures, Switzerland’s Partners Group and Auda are among those that are also in the market raising new funds or are expected to start fund-raising in the coming months.

The Camelot Group, a New York-based private equity advisory firm, estimates that the amount of dedicated secondary capital raised over the past three to four years totals about $34 billion. —Matthew Sheahan