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Pantheon turns to wealthy individuals for new fund

  • Pantheon would be first fund of funds tapping wealthy individuals
  • Firm launching AMG Pantheon Private Equity Master Fund LLC
  • Fund plans to charge a management fee of 1.25 percent

The new master fund sets a minimum investment level of $50,000 for access to Pantheon’s fund-of-funds for accredited investors under U.S. securities rules: a person who has individual net worth, or joint net worth with their spouse, exceeding $1 million, excluding the value of their  primary residence; or a person with income come exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years.

Pantheon, a unit of Affiliated Managers Group Inc, named Sheldon Chang, managing director, to lead the new Pantheon Private Wealth (Pantheon PW) unit, according to a statement from the San Francisco firm. Prior to joining Pantheon, Chang worked for more than six years at Bank of America Merrill Lynch as a managing director handling private equity and real assets products for the firm’s wealth management division, according to his LinkedIn profile.

”Pantheon PW aims to leverage the full breadth of Pantheon’s capabilities to deliver comprehensive private market investment solutions to high net worth individuals and their investment professionals,” the firm said in a prepared statement. A spokesman for Pantheon declined to comment.

AMG Pantheon Private Equity Master Fund LLC would charge a 1.25 percent management fee, according to a table in the filing. All fees associated with the fund would total 4.55 percent, minus about 1.2 percent for fee waivers and expense reimbursements for a total estimated fund operating expense of 3.34 percent.

Units of the master fund will be issued solely in private placement transactions that do not involve any “public offering” under securities laws, according to the filing.

Pantheon’s move marks the latest in a push by private equity to tap fresh capital from individuals, rather than their usual list of institutional investors: public pensions, corporate retirement funds, family offices and sovereign wealth funds.

Among the more recent initiatives, Kohlberg Kravis Roberts & Co filed plans for the Altegris KKR Private Equity Master Fund, with a minimum investment of $10,000, aimed at accredited investors.

KKR is also reported to be working with the Nasdaq OMX Group Inc on a private exchange for trading interests in funds. In May, Nasdaq hired Adena Friedman, who rejoined the exchange as president of global corporate and information technology solutions, after she had worked as chief financial officer of The Carlyle Group since 2011.

Meanwhile, Carlyle Group co-founder David Rubenstein has been touting the potential of opening up private equity as an assert class to individual investors. In April, Carlyle Group named Jeffrey Holland as managing director and head of its private client group. He previously worked as managing director and chief operating officer for retail at the money manager BlackRock.

Last year, Carlyle Group tapped Central Park Group as a distributor behind CPG Carlyle Private Equity Fund LLC, a closed-end, regulated investment company with a minimum commitment of $50,000.

Private equity firms already have been seeing more participation from qualified purchasers with $5 million or more in investments. These investors often get access to private equity funds through feeder vehicles.