Professional Documents
Culture Documents
This month’s issue focuses on the latest happenings in the private equity fundraising market. The full results of a rather sparse
quarter for global private equity fundraising are examined in detail in our quarterly update, while the feature article suggests
the approach that fund managers should be taking to secure investments in the current environment.
We also take an in-depth look at endowments as an investor class, and consider newly available performance data for the
industry as at 31st March 2009. Private equity performance is still sliding at this point, but the evidence suggests that it may
be bottoming out, with early indications that mid-year figures will see stabilization and possibly improvement on the first
quarter results.
On the conference front we are happy to be offering all Spotlight readers a 30% discount for places at the Private Equity
Exchange in Paris on December 2nd. You can also further save 400 EUR by registering before the 20th of October.
Private Equity Exchange addresses the European private equity community by gathering LPs, GPs and CEOs for One to One
Deal Meetings™ and three tracks conferences focused on raising the next fund, underperformance and restructuring (780
participants and 80 speakers in 2008).
Preqin will be attending the event, and hope to see you there.
Kindest regards,
Tim Friedman
Head of Communications
Preqin Ltd.
For all bookings & enquiries, please contact Gabriel Hui
Quote the VIP: XYZHUI0809 for your 30% discount:
Tel: 33 1 43 92 93 66
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Private Equity Spotlight www.preqin.com
October 2009 / Volume 5 - Issue 10
Welcome to the latest edition of Private Equity Spotlight, the monthly newsletter from Preqin, providing insights into private equity performance,
investors and fundraising. Private Equity Spotlight combines information from our online products Performance Analyst, Investor Intelligence,
Fund Manager Profiles & Funds in Market.
Private Equity Fundraising in Difficult Times This month’s Fundraising Spotlight takes an in-depth look at
fundraising in Q3 2009.
We look at what Q3’s fundraising results means for fundraising
in the future and what approach fund managers need to take to
secure new investments.
Secondaries Spotlight page 21
Endowment Survey
Conferences Spotlight page 22
This month we look at the results of Preqin’s endowment survey
We look at the upcoming events in the private equity world.
to assess how this investor type has changed its view of private
equity since the financial crisis hit.
Private Equity Performance as of Q1 2009 All the latest news on private equity investors including:
This month we look at the latest private equity performance • Bucknell University Endowment
figures and compare these to the public markets.
• Washington State Investment Board
Feature Article
Private Equity Fundraising in Difficult Times
If anyone needed confirmation of just how – 2010 vintages will deliver good raise a new fund:
difficult it is to raise a new private equity returns.
fund in today’s environment, then our Q3 • Appetite: the LP appetite is definitely
Fundraising Update on page 13 provides • 62% of LPs Currently Looking for there for the right strategies and
it. Whatever statistic you look at, the New Investments: liquidity problems teams. However, the amount of
picture seems to be one of unrelenting have forced many LPs to shelve their money they have available to commit
gloom: lowest final closes for nearly six current investment plans, but the fact may be less than previously.
years (82 funds, $39 billion raised); a 3% remains that 62% of the LPs polled
decline in funds on the road as managers are still looking for new investment • LP Churn: some of the LPs you
abandon their plans; and the average opportunities. They may be more know, and who may have supported
time taken to raise a new fund extending cautious and selective than ever your previous funds, will be out of the
beyond 18 months for the first time. before (we’ll come onto this later), market for the time being. However,
but they are still looking. other new LPs are coming in to the
Well, nobody said 2009 was going to be asset class and/or re-assessing the
easy. However, dig beneath the surface, Further encouragement comes from strategies they want to invest in.
and there are reasons for confidence. interim closes. Q3 2009 may have been You need to find the right LPs and
First and foremost, the LPs investing in a dreadful quarter for final closes, but, connect with them;
private equity retain their appetite for as Fig. 1 shows, the number of funds
the asset class. Preqin is in continuous that have achieved interim closes is • Competition: you may have a great
contact with thousands of LPs from at least showing signs of life. 81 new strategy, team and proposition, but
around the world, and in our most funds achieved an interim close during it will not be unique – 1,570 other
recent survey of investment intentions Q3, confirming that managers with a funds are competing for the LP’s
(conducted together with the BVCA compelling proposition are finding LPs attention. Why should the LP invest
during July and August) the following key to make commitments to their funds. with you? You need something
findings emerged: The fact that there is some momentum special;
in interim closes may well be a reflection
• Target Allocations: most LPs (over of how long it is taking managers to • Focus on the Downside: LPs know
80%) intend to maintain their target achieve their targets: better at least to that there will be great investment
allocations over both the short and have an interim close and get on with the opportunities out there in 2009 and
long term. Over the very short term business of investing, rather than wait to 2010, you don’t need to convince
(12 months), there was a slight reach the initial target. them of that. What they do need
bias towards reducing targets (11% convincing of is that you have the
vs. 7% increasing), while over the The elephant in the room is, of course, team and the processes in place to
medium term (24 months), there dry powder: with over $1 trillion already protect against the downside in a
was a more noticeable tendency committed to existing funds, as shown difficult environment;
to increase targets (15% vs. 5% in Fig. 2, LPs’
decreasing). ability to commit
large sums to Fig. 1:
• Factors Influencing Targets: most of new funds is
the LPs surveyed are satisfied with limited.
Private Equity Interim Closes by Quarter
the returns on their private equity 90
portfolios. Among those planning to Combine this 82 81
80
reduce their targets in the short term, dry powder
Number of Interim Closes
70 67
the reasons are overwhelmingly with the fact
liquidity-related – in particular the that there are 60
dreaded ‘D’ word. Conversely, the still 1,571 new 50
reasons cited for increases in private funds on the
40
equity targets are overwhelmingly road competing
returns-related. for LPs’ 30
commitments, 20
• Optimism about Future Returns: LPs and you have 10
are generally optimistic on return the ‘New 0
prospects for private equity, with Normal’ facing Q1 2009 Q2 2009 Q3 2009
87% of LPs agreeing that the 2008 GPs trying to Source: Preqin
0
Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Oct-09
Source: Preqin
Please contact Preqin to see how our unique Investor Intelligence database of LP profiles, and our Fund Terms Advisor service
on terms and conditions can help you succeed in today’s challenging fundraising market.
For more information, or to register for trial access of these products, please visit:
www.preqin.com
The report concludes that the majority of investors in private equity funds intend to keep their allocation to the asset
class stable, with only a small number (5%) planning to decrease their allocation over two years and a significant
number (15%) expecting to increase allocation levels over the next two years.
The survey also found that a significant proportion of North American investors not currently invested in UK private
equity funds (LPs) consider themselves likely to start investing with UK firms in the future, with more than 20% likely
to invest in UK venture capital.
Investor Spotlight:
Survey of Endowments
Continuing with our series of research
reports studying the effects of the Fig. 1:
financial crisis on institutional investor
confidence, Preqin surveyed 100
endowment plans from across the What Changes Have Been Made to Private Equity Plans as a Result of the Financial Crisis?
globe in order to gauge how their
private equity activity had changed over 50%
the past year and what their long-term 45% 43%
Proportion of Respondents (%)
Fig. 3: Fig. 4:
When Will You Next Invest in Private Equity? How Does Your Curent Allocation Compare to Your Target
Allocation?
Outlook two years, with one European endowment high-profile funds that tend to employ
stating that the private equity market significant over-commitment strategies
Despite the financial turmoil and poor was “currently overcrowded and full that are most affected. Additionally,
returns recorded by private equity of problems.” A considerable 24% of a more pressing issue forcing some
over the past year, the vast majority of respondents are avoiding the asset class endowments into secondary sales is that
respondents planned to maintain their until 2011 or later. of liquidity, which some reports have also
allocations to the asset class over the alluded to.
next 12 months, with only 9% intending
to decrease their allocations to private “...13% of respondents Our survey indicates that although
equity in the coming year. Over the long endowments’ attitudes towards private
are looking to increase equity have been significantly affected
term this percentage increases, with 14%
of respondents planning to decrease their their allocations to private by the global financial crisis, in general,
allocations to private equity over the next they are still seeking to invest in the asset
three to five years.
equity over the next 12 class. However, future investments will
months, and over the long be reviewed under a more stringent due
However, 13% of respondents are looking diligence process, and there is likely to be
to increase their allocations to private
term 32% of endowments a slightly reduced level of investment in
equity over the next 12 months, and plan to increase their the short term.
over the long-term 32% of endowments Dami Sogunro
plan to increase their target allocations target allocations to the
to the asset class. Both of these figures asset class...”
outweigh the proportions looking to
decrease their allocations over each time Preqin’s Investor Intelligence
period. Allocations database is a vital tool for all
professionals involved in the
In recent weeks, several reports have capital raising process for
New Commitments
suggested that many endowments are private equity funds. It contains
being forced to sell their interests on the up-to-date profiles for more
As Fig. 3 shows, 63% of respondents
secondary market as a result of being than 4,000 investors in private
will be investing in the asset class at
above their target allocations to private equity, including key information
some point before the end of 2010, with
equity. From our survey, we found that on investment preferences,
21% looking to invest before the end of
74% of respondents are either at or below investment plans both for the
2009. One New York-based endowment
their target allocation to private equity, next 12 months and over the
reasoned that “the next 6-18 months
with just over a quarter stating that they longer term, and key contact
will be a great time to invest, as credit is
are above their target. Interestingly, a information for appropriate
starting to come back into the market and
large proportion of the endowments personnel at each institution.
this will make investments in the asset
class more appealing.” that reported being above their target
allocations to private equity have total For more information or a free
assets in excess of $500 million, which trial to Investor Intelligence,
7% stated that they would not be
would suggest that it is the larger, more please
p contact: info@preqin.com.
@p q
investing in the asset class for the next
Performance Spotlight:
Private Equity Performance
As of Q1 2009
Real
It should be noted, however, that -40 Estate
comparisons made between the public
indices and private equity at March -50 Source: Preqin
from the previous quarter. It is not until This analysis indicates that private equity
June 2008 that declines in NAVs are performance was still in decline during Much of the data used in this
posted and, unsurprisingly, Q3 2008 Q1 2009, but that the rate of decline research has been taken from
and Q4 2008 show the most significant had slowed considerably from 2008. Preqin’s Performance Analyst
changes for mega buyout funds, with Considering the medium- to long-term database. Please contact us if
quarter-on-quarter losses of 9% and returns, the asset class is still showing you would like further information
22% respectively. The first quarter of healthy returns and clearly outperforms on this, or to arrange a trial
2009 shows a smaller quarter-on-quarter public indices. Private equity is certainly access to see how you can
decrease of around 4%. experiencing one of its most difficult benefit from the database. In
periods but the rapid drop in valuations addition, Preqin’s Performance
Small buyout funds, which use less seen during Q4 2008 are slowing, leading Benchmarks are now available
leverage, appear to have been prone us to believe that the worst is over. free of charge.
to the adverse affects of the current
economic crisis and fund revaluation For more information on both of
techniques. Small buyouts marginally these services, please visit:
increased their portfolio valuations in Q4
2007 to Q2 2008 and reported no change Bronwyn Williams www.preqin.com
in the third quarter of 2008. & Etienne Paresys
Preqin’s Review is the ultimate guide to the PE real estate industry, with comprehensive
profiles and analysis gathered via direct contact by our analysts with hundreds of leading The 2009 Preqin Private Equity
Real Estate Review
firms and investors worldwide. Highlights of this year’s edition include:
• Detailed analysis examining the history and development of the PERE market;
recent funds closed; the current fundraising market; fund terms and conditions;
investors; performance; plus separate sections showing key facts and figures for
the most important sub-sectors (opportunistic, value add, debt etc).
• Profiles for 350 most important active PERE firms and details for over 1,500
funds, including investment strategies and key information.
• Profiles for over 250 active institutional investors in the sector, including
investment preferences and key contact details. For more info: www.preqin.com/rer
• Detailed listings for all funds recently closed, plus funds currently raising.
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Fig. 2:
100
Between December 2003 and October Dry Powder Available to Venture Capital Firms by Regional Focus
2009 the amount of capital available to 100
North American focused venture funds
has fluctuated, peaking at $89 billion 90
in December 2007 and dipping to $79 80
billion in December 2008. Europe
Dry Powder ($bn)
70
The amount of dry powder available 60
ROW
to venture funds focusing on Asia and
50
Rest of World has followed a similar
pattern to North American focused 40
North
funds since December 2005. It too 30 America
peaked in December 2007, at $46
billion. The only year-on-year decrease 20
in its dry powder levels was measured 10
in December 2008, when the economic
0
slowdown resulted in a 7% decrease
Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Oct 09
from the previous year in the amount
Source: Preqin
of dry powder available.
Fund Manager Profiles - Dry Powder. View historical dry powder across the private equity industry for all private equity fund types
and geographic regions.
Please visit www.preqin.com for more information and to register for trial access.
Fundraising Spotlight:
Global Fundraising Update Q3 2009
Private equity fundraising in 2009 has
replicated the quarterly fundraising Fig. 1:
pattern of recent years, albeit at much
lower levels, with the least capital
raised in the third quarter. Private Private Equity Fundraising by Quarter: Q1 2007 - Q3 2009
equity has taken a considerable 400 380
hit during the economic crisis and
348
no quarter in 2009 so far has seen 350
fundraising reach above $100 billion.
300 286
There were hopes that fundraising 263
249
was picking up when Q2 saw a 30% 250 231 238
217
increase on the total raised in Q1, but 207.8
196.5
192.9
in the following quarter private equity 200
163.3
fundraising hit its lowest level since 150.5 146
150
2003. The private equity industry will 122.7 121.1 118.7 123
Fundraising Spotlight:
Funds in Market
There are currently 1,571 private equity have the second
funds in market with an aggregate target largest aggregate Fig. 3:
of $735 billion, a decrease of 8% from capital target,
the $801.1 billion sought in Q2 2009. with $167.7 billion
Significantly, the aggregate target of being sought by Number and Value of Funds in Market Q1 2007 - Q3 2009
funds in market is currently 21% down 436 funds, $100
from its peak, recorded one year ago in million more than 1800 1673
1625
Q3 2008, of $934.2 billion. is being targeted 1600 1533
1601 1609 1571
Fig. 4: Fig. 5:
Number and Value of Funds in Market by Region Number and Value of Funds in Market by Strategy
800 756
700
600
500
436
399.7
400 379
300
100
0
North America Asia & Rest of World Europe
Fundraising Spotlight:
Regional Fundraising
Of the 82 private equity funds that
reached final close in Q3 2009,
Fig. 6:
29 were focused on investing
predominately in North America.
These 29 funds accounted for 68% Aggregate Capital Raised by Regional Focus: Q3 2009
of the aggregate capital raised during
the quarter. Funds focusing on Asia
and Rest of World accounted for
Aggregate Capital Raised ($bn)
Fundraising Spotlight:
Buyout Funds
16 buyout funds reached a final close Top 10 Buyout Funds to Close in Q3 2009, by Fund Size
during Q3 2009, raising $24 billion, a
Fund Firm Size (mn) Location Fund Focus
21% decrease on the $30.4 raised in Q2
2009. Fundraising for buyout vehicles still Hellman & Friedman VII Hellman & Friedman 8,800 USD US US
remains extremely challenging. TA XI TA Associates 4,000 USD US US
Quantum Energy Partners Quantum Energy 2,500 USD US US
Over 50% of the Q3 2009 buyout capital V Partners
raised was collected by just two funds, MBK Partners II MBK Partners 1,600 USD South Korea ROW
the $8.8 billion Hellman & Friedman VII, Charlesbank Equity Charlesbank Capital 1,500 USD US US
and the $4 billion TA XI. Five buyout Partners VII Partners
funds of over $1 billion in size contributed Unison Capital Partners III Unison Capital 140,000 JPY Japan ROW
34% of the aggregate buyout total for the Huntsman Gay Capital H&G Capital Partners 1,100 USD US US
quarter. Partners
India Value Fund IV India Value Fund 725 USD India ROW
Hellman & Friedman VII, the largest Advisors
buyout fund to close in Q3 2009, KKR E2 Investors - Annex Kohlberg Kravis 400 EUR US Europe
invests across the globe in a range of Fund Roberts
industries that includes communications, Graham Partners Graham Partners 515 USD US US
media, financial services and software. Investments III
Investors in the fund include California Source: Preqin
State Teachers’ Retirement System
(CalSTRS) and Government of Singapore searching for opportunities across the
Investment Corporation (GIC). “...Over 50% of the Q3 US.
Fig. 7: Fig. 8:
Buyout Fundraising by Quarter: Q1 2007 - Q3 2009 Breakdown of Q3 2009 Aggregate Commitments to Buyout Fund, by
90 85.3
Fund Size
82.2
80
72
70.4
70 67.5
62
57.1 59
60 55
53
49.2 49
50
44
41.4
40 38
33.2
30.4
30 28 27.2
24.0
20 18
16
10
0
2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Fundraising Spotlight:
Venture Funds
As with buyout funds, venture fundraising sector, with the remainder invested in IT. Park-based Khosla Ventures raised its
in Q3 2009 continued its decline to its It has attracted investments from limited third vehicle in conjunction with the $250
lowest level in recent years. The $5.5 partners including Alameda County million Khosla Ventures Seed Fund.
billion raised from 33 venture funds was a Employees’ Retirement Association,
19% decrease on figures from Q2 2009, California Public Employees’ Retirement
and a 67% decrease from the $16.6 System (CalPERS) and Tennessee
billion raised by 68 venture funds in Q3 Consolidated Retirement System. Menlo
2008.
Fig. 10 shows that 42% of all capital Top 10 Venture Funds to Close in Q3 2009, by Fund Size
raised by venture funds during Q3 2009 Fund Firm Size (mn) Location Fund Focus
was committed to funds with no specified Khosla Ventures III Khosla Ventures 750 USD US US
stage preference, with this type of Matrix Partners Fund Matrix Partners 600 USD US US
fund raising $2.28 billion in the three- IX
month period to the end of September Domain Partners VIII Domain Associates 500 USD US US
2009. Expansion and late stage funds
Virgin Green Fund Virgin Green Fund 350 USD UK Europe
contributed a fraction less than general
Khosla Ventures Seed Khosla Ventures 250 USD US US
venture funds, with 41% of the total
Fund
capital raised, or $2.26 billion, while early
NGEN Partners III NGEN Partners 250 USD US US
stage funds raised $0.9 billion, 17% of all
venture commitments. Cowen Healthcare Cowen Capital Partners 250 USD US US
Royalty Partners Top
Up Fund
Khosla Ventures III is the largest venture
Keytone Ventures Keytone Ventures 200 USD China ROW
fund to have reached a final close
China Fund
between July and September 2009.
Aureos Latin America Aureos Capital 184 USD UK ROW
Expansion fund Khosla Ventures III
Fund
closed fundraising at the beginning of
Heureka Growth Fund Acton Capital Partners 127 EUR Germany Europe
September with $750 million in committed
capital. A US focused fund, it will invest Source: Preqin
around 75% of its capital in the cleantech
Venture Fundraising by Quarter: Q1 2007 - Q3 2009 Breakdown of Q3 2009 Aggregate Commitments to Venture Fund, by
120
Fund Type
112
99
100
86
79 78
80
72
69 68
60
48 46
40 33
18.4 20.0
20 14.1 16.3 15.4 15.5 16.6
10.5
7.7 6.8 5.5
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009
Number of Funds Aggregate Value ($ bn)
Source: Preqin Source: Preqin
Fundraising Spotlight:
Other Types of Fund
Fig. 11 displays the largest other types basis. While intending to be as global office, retail and hotel properties. Another
of fund that managed to achieve a final as possible, it expects to be more real estate fund, Broadway Real Estate
close in Q3 2009. The table is led by heavily weighted towards US focused Fund III, attracted $700 million in capital
Pomona Capital VII, the only non-buyout investments. commitments, closing short of its initial
fund to attract commitments above $1 $1 billion target. A notable investor in
billion in the quarter. The fund targets Fig. 11 also lists two real estate funds the fund is Pennsylvania Public School
small to mid-size portfolios of stakes in and one fund of funds of similar value Employees’ Retirement System.
private equity funds. that closed in Q3 2009. Dune Real Estate
Fund II attracted $800 million with the
Hamilton Lane’s second secondaries assistance of placement agent Monument
fund also recorded its final close in the Group and is focused on the US with
quarter, raising $591 million in capital 15-25% allocated to Western Europe. It is
commitments. Hamilton Lane Secondary focused on high barrier to entry markets
Fund II invests on an opportunistic and will invest in apartment, industrial,
Fig. 11: Top 5 Other Types of Funds to Close in Q3 2009 by Fund Size
Fund Firm Type Size (mn) Location Fund Focus
Pomona Capital VII Pomona Capital Secondaries 1,300 USD US US
Dune Real Estate Fund II Dune Capital Management Real Estate 800 USD US US
Broadway Real Estate Fund III Broadway Partners Real Estate 700 USD US US
Teralys Capital Fund Teralys Capital Fund of Funds 700 CAD Canada US
Hamilton Lane Secondary Fund II Hamilton Lane Secondaries 591 USD US US
Source: Preqin
Fundraising Spotlight:
Abandoned Funds
Fig. 12 shows the growth in the
number of abandoned funds over the
Fig. 12:
past five quarters, which encompasses
the arrival of the economic crisis in
private equity fundraising. The figures Abandoned Funds by Quarter: Q3 2008 - Q3 2009
presented include funds for which 20 19
Preqin has information for the date 18
18
of abandonment; however it is not an
exhaustive list of all funds that have 16 15
discarded their fundraising efforts 14
before reaching a final close. As such, 11.7
12 11
Fig. 12 can be used as an illustrative 10.2
tool to portray the escalation in private 10 9
equity fundraising abandonments. 8
The number of abandonments rises 6 5.2
steadily each month, and as more data 4.5
3.8
is collected in the coming months we 4
can expect to see Q3 2009 figures rise 2
further. 0
Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009
30%
RESTRUCTURING
CONFERENCES
Thomas Pütter Jean-Louis de Bernardy Gonzague de Blignières Monish Dutt Philippe Roesch Charles Soulignac Valerie Handal Christopher Masek
Chief Executive Officer, President, AFIC Co-CEO, Chief Credit Officer, Head of PE Europe, Chief Executive Officer, Vice President, Managing Partner,
Allianz Capital Partners Barclays PE Europe IFC, Auda Alternative Fondinvest HarbourVest Partners IK Investment Partners
World Bank Investments
Paul Newsome Amanda Tonsgaard Henry Jackson Filippo J Cardini Eric Meyer Mathieu Guillemin Jean-Hervé Lorenzi Alain Dib
Head of PE Director, CEO, Chief Operating Officer Head of Managing Director President Global Head
Unigestion Capital Dynamics Merchant Equity Partners & Managing Director, Leveraged Loans Oaktree Capital Cercle des Économistes of Distressed Finance
Tower Brook Société Générale Group
BNP Paribas
SPONSORS
PARTNERS
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Preqin’s
Secondary Market
Monitor
www.preqin.com/secondarymonitor
Secondaries Spotlight
Preqin’s Secondary Market Monitor comprises a comprehensive database of potential buyers and sellers of private equity fund
interests, and their corresponding investment preferences. The system currently boasts detailed profiles for over 450 potential
buyers of fund interests, diversified across firm type and location. For more information please visit www.preqin.com/smm
Fig. 1: Fig. 2:
25%
20%
15%
10%
5%
0%
Source: Preqin Europe North America Asia & RoW
Source: Preqin
A variety of both specialist secondary market buyers and
institutional investors are currently interested in purchasing While the absolute number of potential buyers is highest
private equity fund interests on the secondary market. across Europe and North America, a similar level of interest
Private equity funds of funds (29%), pension funds (23%) in secondary market buying opportunities exists on a global
and endowment plans (8%) feature prominently, while scale. Fig. 2 highlights potential buyers of fund interests as
secondary fund of funds managers form 5% of the total a proportion of the total number of investors interviewed in
number of potential secondary market buyers profiled on the that region.
SMM.
According to Preqin's unique pricing model, a $10,000,000 commitment to the median 2006 venture fund - which would have
called $4,950,000 - would today fetch $1,790,081 on the secondary market, or 42.5% of its net asset value.
Secondaries News
Stanford Management Company is looking at the possibility real estate funds. Cogent is then expected to put together
of making the alternative investment industry’s largest combinations of potential buyers and fund stakes before taking
sale of private equity and real estate fund interests on the any formal offers. It is likely that the fund interests will be sold to
secondary market a number of different buyers.
The USD 12.6 billion endowment plan has hired Cogent
Partners to assist with the sale of fund interests from its New Jersey State Investment Council has now begun its
alternative investment portfolio. The portfolio consists of USD search for a secondary manager
13 billion in commitments to what the endowment considers to Following its decision in July 2009 to begin work on a ‘request
be illiquid funds. It is considering selling in order to re-deploy for proposals’ for a private equity secondary mandate, the
capital and re-balance its investment portfolio. Cogent Partners USD 56.3 billion pension fund has now begun looking for a
is inviting potential buyers to bid on any part of the alternative secondary manager to advise it on purchasing private equity
investment portfolio until 27 October. Approximately 80% of the fund interests on the secondary market in the near future. It is
offering consists of interests in private equity vehicles, including interested in the possibility of buying interests in venture capital
mid-size and large buyout, venture capital and distressed or buyout funds.
debt funds. The offering also includes stakes in forestry and Kerry Pogue
Conferences Spotlight:
Forthcoming
Events
Featured Conferences
Information: Information:
www.private-equity-exchange.com www.dealflowmedia.com/
conferences/pes_conference_09.
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The IBF Media India Private Equity Conference is the largest private Designed to Meet the Needs of GPs, LPs, & Managers of Buyout,
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Information: Information:
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Conferences Spotlight:
Forthcoming
Events
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r s, d 9TH ANNUAL Brand New – Access to all delegates ahead of the event
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ee F ts s
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En Fo jec
t HARVARD BUSINESS SCHOOL
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PSP INVESTMENTS ALPINVEST PARTNERS SIGULER GUFF PARTNERS Max L Heine Professor of Finance
NYU STERN SCHOOL OF BUSINESS
LEADING PRIVATE
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Global Head Private Chief Executive Co-Founder & Chairman, Chief CEO Jacob H Schiff Professor of Investment Banking
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CANTOR FITZGERALD Secondaries Summit: 17 November 2009
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Investor Spotlight:
LP News
International Finance Corporation (IFC) has made a Phoenix Insurance Company plans to resume investing in
cornerstone investment in Vietnam Pioneer Partners’ maiden private equity in 2010 with commitments to three or four
fund vehicles
IFC has agreed to commit 20% of the capital raised by Vietnam The USD 17 billion insurance company has not made any new
Pioneer Partners for the Vietnam Pioneer Fund, up to a commitments in 2009 after finding itself overcommitted to the
maximum of USD 20 million. IFC also holds a 10% stake in the asset class at the start of the year. The Israel-based firm believes
management of Vietnam Pioneer Partners. The expansion fund, it will add to its portfolio in 2010, however, and intends to commit
which has a target of USD 100 million and expects to hold a first approximately USD 10 million to three or four funds. It will seek
close by Q1 2010, focuses on consumer goods in Vietnam. The buyout and venture funds as well as vehicles targeting distressed
USD 32.4 billion IFC typically invests in emerging markets and is private equity opportunities. While Phoenix Insurance Company’s
also an active supporter of first-time fund managers. investments primarily focus on Israel, it also considers
opportunities to gain further exposure to Europe, the US and
Old Mutual Investment Group (South Africa) plans to make emerging markets. It will consider forging new relationships
commitments totalling USD 20 million in the next 12 months with managers as well as investing with those managers it has
Old Mutual Investment Group (South Africa), (OMIGSA), intends previously committed capital to.
to establish new relationships with managers in the next year as
it seeks to commit to two private equity vehicles. It has a broad Austin College Endowment is looking to expand the
geographic scope, considering funds targeting the US, Europe geographic scope of its private equity portfolio
and emerging markets, and will primarily look for opportunities to The Texas-based endowment plan has historically focused its
invest in buyout, venture and secondaries funds. OMIGSA, which private equity investments on North America, but over the next
is the asset management arm of Old Mutual South Africa, invests 12 months will search for opportunities on a more global scale.
both directly and through private equity funds. It does not look to The USD 110 million endowment has a 3.6% current allocation to
co-invest alongside fund managers, however. private equity and will look to fulfil its 5% target by gaining global
exposure to the asset class. Austin College Endowment has a
Bucknell University Endowment is looking to narrow the preference for investing in mezzanine vehicles.
focus of its private equity activity
The endowment of Pennsylvania-based Bucknell University MP Pension plans to commit approximately EUR 150 million
has identified emerging markets as the geographic focus for the to private equity over the next 12 months
majority of its private equity investment in 2010. The endowment The EUR 8 billion public pension fund will primarily seek to invest
plan is hoping to access better returns in emerging markets in funds targeting small to mid-market buyout opportunities in
than within its historically preferred region of North America, Europe and the US. It anticipates making commitments of EUR
due to the impact of the financial crisis. The USD 425 million 20-50 million to between three and five vehicles during the next
endowment, which has a 15% allocation to private equity, will year and will consider establishing new relationships with GPs as
also seek opportunities in distressed debt as it aims to maintain well as maintaining relationships with existing fund managers.
its allocation to the asset class over the short- and long-term.
Government of Singapore Investment Corporation (GIC) is
Washington State Investment Board (WSIB) commits a total one of the investors in CDH China Fund IV
of USD 400 million to two Oaktree funds The USD 300 billion sovereign wealth fund recently made a
The USD 64.6 billion public pension fund pledged USD 250 commitment to the CDH China Fund IV, which has held a first
million to OCM Opportunities Fund VIII, and USD 150 million close on USD 750 million. GIC invests on a global scale without
to OCM Principal Opportunities Fund V. These are both 2009 specific industry preferences, and typically commits between
vintage distressed debt vehicles and focus on a range of USD 50 million and 600 million to a single fund. Another investor
industries globally. WSIB has a target allocation of 25% to in the China focused buyout fund is the International Finance
private equity and holds a diversified portfolio, investing in a wide Corporation (IFC). Both GIC and IFC have previously invested in
variety of fund types and opportunities on a global scale. CDH China Funds.
Hanna Ohlsson
Each month Spotlight provides a selection of the recent news on institutional investors in private equity.
More news and updates are available online for Investor Intelligence and Secondary Market Monitor subscribers.
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