Capvent launches second multi-investor fund-of-funds

Capital Venture Partners has announced details of a $400m fund that will focus on “scale down opportunities”.

Capvent, the Zurich-based private equity fund of funds manager, has launched a second multi-investor fund-of-funds. Capvent Global Private Equity II (CGPE II) will look to invest in both primary and secondary investments in European and US funds with a value of $50-300m.

CPGE II plans to invest in buyout and venture capital funds that have established partnerships with firms that have strong positions in their domestic markets. According to Varun Sood, a director at Capvent, the fund is hoping to take advantage of an unwillingness amongst institutional investors to invest in sub $250m funds.

Sood points out that in recent years, many medium-sized firms have opted to increase the size of their funds in order to compete with large funds who seek assets from institutional investors. This has left smaller, well-managed funds starved of investment despite their geographic and sector focus strengths. Tom Clausen, director at Capvent added, “In 2000 over 70 per cent of the investment funds went to large funds, despite the larger number of smaller to medium sized GPs. Smaller GPs are frequently offered very significant local opportunities which we hope to capitalise on.”

According to Sood, who along with Clausen recently published research looking at the trends in fund sizes, “there is a demonstrated need for large buyout funds, but the ‘Global Mega VC fund’ is as yet an unproven concept. There is an unprecedented amount of un-invested capital and this could be detrimental to the future performance of large funds. We believe that there exist substantial opportunities to invest in smaller funds that often have experienced management.”

Capvent (Capital Venture Partners AG) is a fund of funds management organisation founded in 2000 as MTECx Advisers AG, that focuses exclusively on the institutional investor base. Via its presence in the US, in Continental Europe and the UK, the company manages fund of funds programs on a discretionary basis via its Capvent Global Private Equity (CGPE) series of multi-investor fund of funds, and also advises institutional programs on a non-discretionary basis.