HSBC has launched HSBC European Private Equity Syndicate II, a successor vehicle to HSBC Republic European Private Equity Syndicate, which raised £58.5m. HSBC European Private Equity Syndicate II will give high net worth (HNW) individuals access to Montagu III, which is the latest E2bn buyout fund being raised by Montagu Private Equity since the majority of HSBC European Private Equity Syndicate II will be invested in Montagu III.
Access to private equity funds of this size and popularity is restricted for private individuals simply because such funds seek commitments from their investors in the tens of millions. However, HSBC European Private Equity Syndicate II aims to raise E100m and so is attractive to Montagu Private Equity in that it will act as one investor, and the administrative burden created by the sheer number of investors that will be behind the syndicate rests with the syndicate manager HSBC. HSBC is likely to source the investors in the syndicate from its private banking relationships.
Montagu Private Equity was formerly known as HSBC Private Equity and was until earlier this millennium part of the HSBC group. There are a few other firms that accept money from feeder funds managed by their former parent company. They include Duke Street Capital, which was formerly known as Hambro Venture Partners (and part of merchant bank SG Hambro), and Permira, which was formerly known as Schroder Ventures (and part of Schroders.)
Minimum investment in HSBC European Private Equity Syndicate II is E250,000 and the expected close date is June 30 this year. The syndicate will have a management fee of 1.25% per annum based on net asset value. HSBC Republic European Private Equity Syndicate generated a net appreciation in investment, including distributions, of 24.4% between September 30, 2001 and September 30, 2004.