Standard Life Investments has achieved a first close on its latest fund-of-funds offering, European Strategic Partners II (ESP II) at _639 million ($629 million), exceeding its first close target of _600 million. Standard Life hopes to achieve a final close of _1 billion by the third quarter of 2003. In anticipation of an increased workload, the group has strengthened its private equity team with the appointments of Craig Williamson, Roland Brinkman and Roger Pim.
Jonny Maxwell, chief executive of Standard Life Investments, is confident: “These are tough markets to [raise funds] in, but we managed to avoid the dotcom and technology madness and so we’ve nothing to apologize for on that front.”
Around half the fund so far has come from new investors and half from existing investors. This excludes the _500 million commitment from Standard Life itself. The first close brings total private equity assets under management at Standard Life Investments to more than _1.8 billion. Since 1993, the group has generated an IRR in excess of 30 percent per annum.
ESP II is the successor to European Strategic Partners, which raised _868 million at its final close in October 2000 and is fully committed to funds with around _200 million still available for direct investments.
Investors in ESP II will benefit from a dual offering and have the choice of participating in either a partnership made up exclusively of private equity funds or a partnership consisting of at least 70% private equity funds and 30% direct investment opportunities.
The investment vehicle will invest in private equity funds that target buyouts and development and expansion capital for transactions valued at between _50 million and _400 million.
“We firmly believe that the Western European buyout market in the _50 million to _500 million transaction size offers the greatest potential for capital appreciation in the years ahead. And, we are hopeful that the fund will hit our target of _1 billion by final closing towards the end of 2003,” said Maxwell.
Standard Life Investments also manages the Standard Life European Private Equity Trust, a _150 million private equity fund-of-funds listed as an investment trust on the London Stock Exchange. Earlier this year the group launched an ISA to invest in the Standard Life European Private Equity Trust.