ATP raises €1bn for Fund IV

The fund of funds group linked to Danish Pension system ATP plans to double emerging markets exposure as it boosts overall investment in 2011.

Denmark’s ATP Private Equity Investors recently closed on €1 billion for its fourth fund of funds. ATP PEP IV is slated to double its asset allocation to emerging assets and seek larger stakes in underlying funds relative to its predecessor.

“Our previous (2007) fund was the first to make allocations to emerging markets. That was at the five percent level, but with this fund we have increased that to 10 percent,” managing director Torben Vangstrup told PEO. “There is no specific geographical focus but we have found opportunities in China, India and Eastern Europe, for instance.”

ATP PEP IV will include a portfolio of up to 25 commitments, primarily targeting buyout and capital growth


funds. A smaller portion will seek opportunities in distressed, turnaround and venture capital. The fund of funds may also make direct co-investments in individual companies, alongside general partners, according to the firm.
“Overall allocations remain below historical levels for us, but we anticipate making larger investments in 2011,” Vangstrup said. In 2009, the fund of funds made allocations of just €142 million, far below average investments of €400 million to €600 million pre-2008. Allocations in 2010 weigh in at an estimated €280 million, and allocations for 2011 are projected to hit €450 million.

“That’s still below historical levels as we look for quality deals where we can deploy capital,” Vangstrup said.
The fourth ATP PEP fund of funds will also seek to take larger stakes in underlying mangers, targeting sizes of €45 million to €50 million. The fund will also seek to balance its allocations more uniformly across underlying general partnerships to manage risk and maximize opportunity, Vangstrup said.

ATP Private Equity Partners, which is funded exclusively from the €70 billion Danish Pension system ATP, manages €6.9 billion.