So far in 2014, Preqin’s Funds in Market online service has tracked 17 new separate account mandates that have been awarded to private equity fund of funds managers over the course of the year. In total, these mandates represent $2.5bn of capital raised towards private equity opportunities in 2014 YTD. As the chart below shows, this figure is less than half the capital awarded last year, when $5.2bn was awarded via separate account mandates. It should be noted, however, that $1.6bn of that amount came from one vehicle: Fond-ICO Global. The fund of funds managers that have been awarded these customized accounts are headquartered globally, with the majority (76%) based in the US, and the remaining firms in the UK (12%), Hong Kong (6%) and France (6%).
Pathway Private Equity Fund XXV is the largest separate account mandate to be announced in 2014 YTD, and is managed by Pathway Capital Management. The US-focused vehicle is $700mn in size, and will take an opportunistic approach with regards to industries and fund types.
Of the separate accounts launched in 2014 YTD, Pantheon has been awarded a total of $813mn through two pools of capital. BVK Private Equity 2014 is a €504mn ($689mn) separate account awarded to the firm by German pension fund Bayerische Versorgungskammer, which intends to invest in buyout, growth and venture capital vehicles. Pantheon will be investing on a global scale and exposing the pension fund to opportunities in the US, Europe, Australia, Latin America, Asia and Africa. Pantheon was also awarded a customized account by the Finnish State Pension Fund in November 2014. Pantheon-VER Separate Account is a €100mn ($124mn) mandate that will be invested in Asia- and emerging markets-focused buyout and growth funds.
The third largest customized account to be launched this year so far is MD Asia Investors II. The $200mn separate account mandate was awarded to Asia Alternatives Management by Maryland State Retirement and Pension System in May 2014, and focuses on gaining exposure to the Asian private equity market.