London Fund Puts $212M in PE

The $5 billion London Pensions Fund Authority (LPFA) is investing about $212 million into three private equity funds, two of which are heavily involved in secondary deals. The LPFA announced this month it was investing $102 million in HarbourVest Partners, $42 million into LGT Capital Partners and $68 million into Pantheon Ventures.

Boston-based HarbourVest and London-based Pantheon will each invest 60% of the funding they receive into U.S. companies. LGT’s funding mandate is for European deals, solely.

LGT’s portion of the funding is likely to go into European buyout deals, says Tycho Sneyers, head of business development with LGT Capital Partners.

“We expect the majority of the funding will go to our Crown European Buyout Fund,” he says. “That is still under discussion within the LPFA.”

LGT Capital Partners is headquartered in Pfffikon, Switzerland with an office in Liechtenstein. The firm has about $2.7 billion under management. LGT is primarily a fund-of-funds firm that also does secondary deals.

HarbourVest has raised $515.2 million so far for its Dover Street V fund, a dedicated secondary fund, according to Thomson Venture Economics (publisher of PE Week). HarbourVest, though based in Boston, has offices in London and Hong Kong and has some $3.6 billion under management.

Pantheon is currently raising a $600 million secondaries fund. Earlier this year, the firm closed Pantheon Europe Fund III with $543 million. Pantheon Ventures operates offices in London, Brussels, Hong Kong and San Francisco while it manages approximately $6.7 billion.

The LPFA was founded in 1989 to serve government workers that were abandoned by the demise of the Greater London Council, which went out of business in 1986, and Inner London Education Authority, which closed in 1990.

The LPFA is the largest pension fund provider in London, with over 70,000 fund members, and one of the largest throughout England. The fund also handles other pension funds as a third party manager and those services account for more than half of its business.

The LPFA announced earlier this year that it would invest 5% of its assets into private equity (see PE Week, May 26, 2003).

The announcement coincided with the British Venture Capital Association’s (BVCA) reporting that U.K. pension plans halved their investments in private equity in 2002.

The BVCA said investments slipped from $2.6 billion in 2001 to $1.3 billion in 2002.

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