Standard Life Investments has unveiled European Strategic Partners II (ESP II), a fund-of-funds which will invest in a both European private equity funds and direct investments. The fund has a target of €1 billion and is the successor to European Strategic Partners which raised €868 million at its final close in October 2000.
Investors in ESP II will have the choice of participating in either a partnership made up exclusively of private equity funds or a partnership consisting of at least 70 per cent private equity funds and 30 per cent direct co-investment opportunities.
The investment vehicle will invest in private equity funds which target buyouts and development and expansion capital for transactions valued between €50 million and €400 million. Direct investments will be made as co-investments alongside investee funds and other institutions with whom Standard Life has an established relationship. Investments will be around €10 million for a minority stake in the business.
With the first fund, the firm avoided getting caught up in the technology bubble, said Jonny Maxwell, chief executive, Standard Life Investments. And this lost the fund certain potential investors who were keen to have an exposure to the technology sector. “However, subsequent events have shown us to be correct in our assessment of the investment environment in 1999 and beyond,” adds Maxwell. “We continue to believe – as we did then – that the European corporate buyout market in the €50 million to €400 million transaction size offers the greatest potential for capital appreciation in the years ahead.”
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. Most recently, the group launched an ISA to invest in the Standard Life European Private Equity Trust. The ISA allows retail investors to tap into private equity, an asset class which is often unavailable to the retail investor – see evcj March, page 4.