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Private Equity Fund of Funds on the Road

by Antonia Lee

  • 02 Jun 2011
  • PE

Preqin data reveals there are currently 159 private equity fund of funds vehicles on the road seeking to raise an aggregate $43.2bn in capital commitments. Under a third (29%) of these funds have held at least one interim close, raising a total of $8.1 billion from investors. The majority (49%) of private equity fund of funds seeking capital have a primary focus for US investments. A significant 26% are looking for investment opportunities in the Rest of World and the remaining 25% are primarily focused on investing in Europe.

The largest private equity fund of funds vehicle currently on the road is HarbourVest International VI Partnership, which is looking to raise $3 billion from investors. The vehicle allows its clients to customise their commitments, weighting them in specific geographies, sectors and fund types. The fund will make investments focused in Europe, Asia and other regions outside of North America.

Over the past month there have also been several new private equity funds of funds entering the market. New York Life Capital Partners began raising capital for its second fund of funds vehicle -NYLCAP Select Manager Fund II. The fund is aiming to raise $250mn from investors and will pursue the same strategy as it predecessor, which targeted established middle-market buyout funds in the US. Hong Kong-based private equity funds of funds manager Squadron Capital recently launched Squadron Asia Pacific III, which has a target of $400mn. Squadron Asia Pacific III focuses on underlying vehicles that target the Asia Pacific region. While it primarily pursues buyout and growth funds, it is not limited from investment with other fund types, including distressed, special situations, mezzanine and venture funds.

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