Edinburgh-based investment manager Martin Currie is planning to launch a second fund-of-funds in the first quarter of next year targeting buyout, venture, mezzanine and special situations funds investing in mid-market companies with an enterprise value of between €50 million to €500 million. The minimum size of the fund will be $100 million but the team is hoping it will surpass this target.
Hamish Mair, head of private equity says the response to the fund so far has been encouraging, in particular due to the hybrid structure the group is proposing. While there is the option of a traditional LP structure, part of the fund will be listed as an investment trust on the London Stock Exchange. “This will give investors a degree of liquidity so there’ll be no cash drag,” says Mair. “A classic buyer into this type of fund is an institution which has some knowledge of private equity and wants to get exposure to Europe, but doesn’t have the scale or resources to do it themselves.”
He added that the funds investing in the next three to five years will be a good vintage. There are many companies out there which are big enough and have the potential to grow internationally, but do not have the capital to do so, he says. “They are restricted in the equity finance that they can access. Banks are reigning in their lending capacity, stock markets are closed so quite a lot of these companies are in need of equity finance.”