SEB Invest, 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, the fund does not have an ultimate target size or specific amount it hopes to raise by this date.
Between 40% and 60% of the fund will be invested in U.S. vehicles, with the same amount destined for Europe and up to 20% available for funds elsewhere.
Stefan Mrelid and Niklas Sjberg, who manage some of SEB’s other private equity interests, will manage the fund. According to Mrelid, private equity portfolio manager at SEB, 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.
SEB’s current involvement with the alternative asset class is through divisions called SEB e-invest and SEB Foretagsinvest, which both invest from the group’s balance sheet;s SEB also makes private equity investments on behalf of its clients. This includes participation in 35 buyout and venture capital funds in Europe and the U.S. totaling 1.5 billion. The new fund is SEB Invest’s 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% for the first year, 0.75 % for the second and 1% for the third. After this they will decrease by 0.1 % each subsequent year. Carried interest is set at 5% and preferred interest at 8%.