Pantheon Ventures, the fund-of funds and secondary investor, is in the midst of raising it’s third European fund-of-funds. The expected capacity of this latest fund will be euro1 billion, the same as its second European fund-of-funds, PEURO II, which raised euro468 million with the remaining capacity coming from segregated investors. PEURO II closed in January this year. Fund raising for PEURO III will wind up towards the end of the first quarter next year and details of segregated investors, at least one of which is new to the firm, will remain confidential until that point.
The fund will be invested over the next three years enabling it to capture the 2002 and 2003 funds, which many expect will come to be regarded as good vintages given the current economic environment, which should facilitate buying low to sell high.
Pantheon reports that the fund raising is seeing a lot of interest from both sides of the Atlantic, with the UK interest interpreted as a consequence of the Myners report and the UK and elsewhere facing uninspiring returns from the publicly quoted equity markets. Carol Kennedy, director of strategic development at Pantheon Ventures, notes that where last year private equity investors were looking for returns north of 20 per cent they are now looking north of 15 per cent. “Returns in the mid teens are looking extremely interesting to [private equity] investors, especially if there is a cash component,” she says.
PEURO III will invest 75 per cent into later stage and buyout funds with the balance going into specialist situations and venture funds. These funds will be both pan-European and country specific.
In addition to a third European fund-of-funds Pantheon is also back in the market for its third Asian fund-of-funds. This time it is seeking to raise $250 million to $300 million having raised $175 million on its second Asian fund-of-funds, which was originally targeted to raise $150 million. That fund-of-funds was closed in the spring of 1998.