SEB, the Swedish financial group, has launched its first private equity fund-of- funds to invest in both buyout and venture capital funds, globally. The fund, SEB Private Equity, will be based in Luxembourg. Although a first closing is scheduled for November 15, 2001 the fund does not have an ultimate target size or specific amount it hopes to raise by this date. Between 40 per cent and 60 per cent of the fund will be invested in US funds, with the same amount destined for Europe and up to 20 per cent available for funds elsewhere.
Stefan Mrelid and Niklas Sjberg, who manage some of SEBs other private equity interests, will manage the fund from Sweden. According to Mrelid, private equity portfolio manager at SEB Invest, the fund was launched in response to the demand for access to private equity funds from the group’s private and institutional clients. The ultimate size of the fund will depend on the response from these investors.
SEBs current involvement with this asset class includes SEB e-invest and SEB Fretagsinvest which both invest from the group’s balance sheet. In addition to these divisions SEB Invest makes private equity investments on behalf of its clients, these include participations in 35 buyout and venture capital funds in Europe and the US totaling 1.5 billion. The new fund is SEB Invests third alternative asset fund. The group launched an equity hedge fund last year and a fixed income hedge fund earlier this year.
The fund is already open to both private banking clients of SEB (making a minimum commitment of 30,000) and institutional investors (committing at least 100,000). The fund will be marketed first in the Scandinavian region and the rest of Europe, where the majority of SEB’s customers are based. Mrelid believes the structure of SEB Private Equity, which is a mutual fund, will attract investors. Management fees are set at 0.5 per cent for the first year, 0.75 per cent for the second and one per cent for the third. After this they will decrease by 0.1 per cent each subsequent year. Carried interest is set at five per cent and preferred interest at eight per cent.