Foreign & Colonial Investment Trust, the UK’s oldest global growth investment fund, intends to increase its exposure to private equity from 3% of its £2.4bn assets to a maximum 20% between 2009 and 2013.
“We are going to make more money in private equity than in the money markets,” according to Jeremy Tigue, F&C Investment Trust’s fund manager. He believes there are more investment opportunities and superior returns coming from the private equity world as an increasing amount of money flows toward it.
When F&C Investment Trust announced in July its interim results, it said it would also commit £75m per year to private equity funds. As part of this process, F&C intends to initially invest an additional £27m with Pantheon and £13.5m with HarbourVest, both principally investing in Asia.
Although F&C Investment Trust is global, Asia remains a key focus for private equity funds. That includes not only mainland China but also Taiwan and South Korea. “Private equity will establish itself and prosper in Asia,” Tigue said.
It was in 2002 that the trust said it planned to commit about 5% of its total assets to private equity by 2008. F&C Investment Trust’s board has now raised that figure to a minimum 10% to make a significant difference on the investment returns the trust makes.