(PrivateEquityCentral.net) Swiss-based fund of funds manager Capital Venture Partners (Capvent) announced yesterday it is launching a structured product based on private equity investments that protects capital to a desired level.
The firm is working with an unnamed bank to make a market for the product, according to a press release. The product will offer capital protection at 90 per cent or 100 per cent, and the term of the investment is six, seven and a half, or ten years, depending on investor preference.
The product will be based on a portfolio of secondary and primary private equity fund investments, according to the release. The product is designed for sophisticated private equity investors who see a need for reducing the possibility for event risk in private equity, according to Varun Sood, co-founder and managing general partner at Capvent.
“There was a demand for this from our clients who want to stay in the asset class, but did not want to take event risk, like war,” Sood said. “We are using a bank to co-guarantee the structure.”
“This is the first time such a product has been launched, and similar to the way REITS developed as a means to access US real estate,” Tom Clausen, co-founder and managing general partner of Capvent, said in the statement. “We feel this could be significant as a means to achieve private equity returns with a much higher degree of convenience and very limited risk.”
In March, Capvent launched a second fund of funds, Capvent Global Private Equity II, targeted at E400m, to make primary and secondary investments in European and US funds with a value of $50m to $300m. In February, the firm was awarded the mandate to provide fund of funds investment advisory services to RenditeWertBeteiligungen, one of the largest fund of funds available to retail investors in Germany. The firm has opened a subsidiary office in the UK and will aim to provide investment advisory services focusing on the institutional investors in the UK, including insurance companies and pension funds.
Capvent, a fund of funds management firm founded in 2000 as MTECx Advisers AG, manages fund of funds programs on a discretionary basis via its Capvent Global Private Equity series of multi-investor fund of funds. Capvent’s specialty focus is on strategies to add value to the portfolios of existing private equity investors, and has invested in several funds in Europe, the UK and the US. It invests in primaries, secondaries and in investment trusts.