Debut fund of funds to raise E500m

Newly established ViaNova Capital has unveiled plans for a new European private equity fund of funds that will not charge investors annual management fees.

ViaNova Capital, a new independent fund manager with offices in London and Zurich, has launched ViaNova European Buyout 2004, a new private equity fund of funds.

ViaNova, which has a target fund size of E500m, has been launched by its four managing partners: Andrew Evans, Edward Gander, Martin Dreher and Thomas Bischoff.

The fund will primarily invest in pan-European private equity buyout funds, with 30 per cent set aside for “high quality specialist or 'rising star' managers that focus on specific countries or regions within Europe.”

The fund will not charge any establishment costs, annual management fees or carried interest. Instead ViaNova will take a two per cent interest in the fund and will receive an initial one-off fee from investors equal to two per cent of their commitments.

According to dated cited by ViaNova, fund of funds typically charge an establishment fees ranging between 0.4 per cent and one per cent of commitments to investors. “This charge reduces the amount of capital available for investment and therefore reduces returns to investors,” commented Andrew Evans, who was previously a member of UBS Capital’s fund investment team, in an interview.

Evans also said ViaNova’s proposition of a one-off management fee as opposed to annual management costs was more attractive to investors than conventional fund of funds cost structures: “Over the life of a typical fund of funds, a total of six to twelve per cent of investors’ commitments is required to pay annual management fees.”

“In a climate of falling returns, investors are increasingly looking to fund of funds managers that can provide high quality investment products, but at significantly lower cost,” said Edward Gander in a statement. 

The firm has hired Ansbacher Fund Services to provide fund administration services. The fund’s auditors are PricewaterhouseCoopers. ViaNova is advised by Clifford Chance.

The fund will also be advised by an independent, external industry panel, to be headed by Roger Brooke, founder and former chairman of Candover, the UK-based buyout house.

“In a climate of falling returns, investors are increasingly looking to fund of funds managers that can provide high quality investment products, but at significantly lower cost,” said Edward Gander in a statement. 

The firm is aiming to hold a first close on the fund in the first half of 2004.