Standard Life Investments has achieved a first close on its latest fund-of-funds offering, European Strategic Partners II (ESP II) at €639 million, exceeding its first close target of €600 million. Standard Life hopes to achieve a final close of €1 billion by the third quarter of 2003. In anticipation of an increased workload, the group has strengthened its private equity team with the appointments of Craig Williamson, Roland Brinkman and Roger Pim.
Jonny Maxwell, chief executive, Standard Life Investments is confident: “These are tough markets to fund raise in, but we managed to avoid the dot.com and technology madness and so we’ve nothing to apologise for on that front.”
Around half the fund so far has come from new investors and half from existing investors. This excludes the €500 million commitment from Standard Life itself.
Maxwell said: “I am particularly pleased that the fund has attracted considerable interest from new investors as well as receiving strong support from Standard Life and existing investors.”
The first close brings total private equity assets under management at Standard Life Investments to over €1.8 billion. Since 1993, the group has generated an IRR in excess of 30 per cent per annum.
ESP II is the successor to European Strategic Partners which raised €868 million at its final close in October 2000 and is fully committed to funds with around €200 million still available for direct investments.
Investors in ESP II will benefit from a dual offering and have the choice of participating in either a partnership made up exclusively of private equity funds or a partnership consisting of at least 70 per cent private equity funds and 30 per cent direct investment opportunities.
The investment vehicle will invest in private equity funds that target buyouts and development and expansion capital for transactions valued at between €50 million and €400 million. Direct investments will be made as co-investments alongside investee funds and other institutions with which Standard Life has an established relationship. Investments will be around €10 million for a minority stake in the business.
;We firmly believe that the Western European buyout market in the €50 to €500 million transaction size offers the greatest potential for capital appreciation in the years ahead. And, are hopeful that the fund will hit our target of €1 billion by final closing towards the end of 2003,” says Maxwell.
Standard Life Investments also manages the Standard Life European Private Equity Trust, a €150 million private equity fund-of-funds listed as an investment trust on the London Stock Exchange. Earlier this year the group launched an ISA to invest in the Standard Life European Private Equity Trust. The ISA allows retail investors to tap into private equity, an asset class that is often unavailable to the retail investor.