Franklin Park Launches New Funds of Funds

Firm: Franklin Park

Fund I: Franklin Park International Fund 2013 LP

Fund II: Franklin Park Venture Fund Series 2013 LP

According to the SEC filings, the firm has so far raised $22 million for Franklin Park International Fund 2013 LP and its Franklin Park Venture Fund Series 2013 LP. The figure could be for each fund or combined. In its 2010 fund of funds series, Franklin Park set a target to raise $100 million, according to an earlier Buyouts article.

The motivation by Franklin Park to offer funds of funds fits squarely with the moves by a number of private equity advisory firms—such as Hamilton Lane, StepStone Group and Mercer—to leverage their research and due diligence efforts by offering funds. That way, these firms not only are able to offer sophisticated advice on which private equity firms to choose, but they also can offer investors the option of investing in a pre-packaged portfolio through their fund-of-funds offerings.

And in the hyper-competitive private equity advisory world, where some contracts last only a few years, offering funds of funds is a way to deepen relationships between adviser and client, since funds of funds have a very long investment period.

But an unusual aspect of Franklin Park’s fund of funds offerings is the fact that the firm does not charge an additional layer of management fees or carried interest to advisory clients that decide to invest in these funds of funds. As long as they stay clients, that is.

Some of the firm’s fund-of-funds clients include the Illinois State Board of Investment, which committed $20 million to the firm’s funds of funds in 2011, the Arkansas Teachers’ Retirement System, which committed $60 million to the firm’s funds in 2012, and the Oklahoma Teachers’ Retirement System, which committed $80 million in 2012.

Nobody from Franklin Park was authorized to speak about its fund of funds, except to say that these vehicles were not investments that the firm actively marketed. The firm’s Web site said the funds “provide diversified, cost-efficient exposure to certain market segments, such as venture capital and international funds.”

Like Hamilton Lane, Franklin Park is based in the Philadelphia suburb of Bala Cynwyd, Pa. Much of the firm’s activities involve advising investors on their private equity portfolios, but a sizable business comes from creating customized accounts for individual LPs that allow them to reach certain goals and exposures within private equity.

Franklin Park is jointly led and owned by its nine managing directors, including Bradley Atkins, Michael Bacine, Laure Brasch, Narayan Chowdhury, Karl Hartmann, Raymond Jackson, James McGovern, Neil Mowery and Kristine O’Connor.