Schroders has announced the first close of its debut fund-of-funds, Schroder Private Equity Fund-of-Funds, at e172 million. The investment vehicle was launched last year with a target of e300 million when fund raising was already showing signs of slowing. The fund is listed on the Irish Stock Exchange and is being marketed to both small and large institutions and high net worth individuals to provide these investors with diversity and the transparency of a listed vehicle.
Andrew Sykes, head of alternative investments, said: “The listing point is one of simplicity and transparency. There are also tax advantages for investors.”
The aim of the fund is to achieve long term capital growth for investors by committing to a portfolio of private equity funds, mainly in the US and Europe. It will invest in over 20 funds with 50 per cent allocated to European funds and between 40 per cent and 60 per cent for US funds. The fund had a pre-commitment facility from Schroders plc and has already committed $150 million in 12 funds including top players Cinven, CVC, Electra and Permira (formerly Schroder Ventures Europe).
The fund-of-funds brings together the expertise of Schroders plc and Schroder Ventures International Investment Trust (SVIIT). Schroders plc, through its subsidiaries Schroder Investment Management (Ireland) Limited and Schroder Investment Management Limited, will act as manager and investment manager, respectively, of the fund. Schroder Ventures, which is a subsidiary of SVIIT, will act as investment adviser to the fund. The investment vehicle plans to invest to a small degree in Schroder Ventures funds going forward, but has limits on assets that it will place on any one group.
Sykes commented: “The significant initial sum on the first close of the fund-of-funds reflects the strong demand for private equity across institutions and high net worth individuals, and the innovative structure of our product, despite unsettled market conditions. We look forward to receiving more commitments before the final close in mid 2002.” West Yorkshire County Council is the only named investor in the fund and has committed GBP10 million.