150 investors in Coller $2.5bn secondary

Coller Capital has closed its fourth secondary private equity fund at $2.5bn at a time when banks alone are looking to offload $25bn of private equity assets.

Coller Capital has confirmed that it has raised $2.5bn from over 150 international investors for Coller International Partners IV LP, the largest secondaries fund raised to date. The fund, launched with an initial target of $1bn, was significantly oversubscribed.

 

The fund will be making investments of all sizes in limited partnership interests and portfolios of direct investments. Jeremy Coller, who founded the firm in 1990 at a time when secondaries investing was in its infancy, commented: “We will continue to implement our strategy of being a one-stop for the $1bn plus portfolios down to the many $1m positions.”

 

Secondaries investing, although a widely recognised liquidity tool in the private equity asset class, remains a highly discreet market place, with none bar the largest transactions becoming known to the general public. Coller Capital has completed some 35 transactions in the past 12 months alone, many of them involving small tickets, but only its purchase of Lucent Technologies’ corporate venture investments has been disclosed.

 

Coller Capital’s closing comes at a time when large quantities of private equity assets are being lined up for a change of ownership. Market practitioners estimate that a group of international banks, including JP Morgan Chase, Dresdner, First Union, BancBoston, Abbey National and Deutsche, have alone earmarked assets worth $25bn for a change of ownership. Last week General Electric announced the de facto closure of its private equity business, GE Equity, which has given rise to the prospect of another $3bn of private equity investments coming into play.

 

Although significant amounts of capital are being raised for secondaries funds at present, many practitioners believe that the market remains under-funded. However, a significant portion of the assets currently in the market, particularly venture capital investments, are thought to be of low quality and hence of limited appeal to potential buyers even at large discounts.    

 

Investors in CIP IV include CalPERS, State of Michigan, General Motors, Canadian Pension Plan, Barclays Pension Fund and Barings, the firm’s original sponsor. Of the fund’s commitments, 47 per cent have come from North America, 38 per cent from Europe, and 15 per cent from the rest of the world. The investors include nine US state pension funds, four sovereign investment authorities, and six universities. Six investors committed $100m or more.