Edmond de Rothschild seeks €1bn across multiple strategies

The private investment arm of the French asset manager will launch hybrid fund of funds, growth capital, infrastructure and real estate vehicles this year.

Edmond de Rothschild Private Equity, the private investment arm of the French asset manager and private bank, is launching a series of funds seeking at least €1 billion in total across multiple niche asset classes.

The firm is expecting to raise €175 million for a “hybrid fund of funds” with secondaries and co-investment pockets, it announced at its Paris headquarters on Friday. It is understood the fund will be 70 percent allocated to primary funds, 10-20 percent to secondaries and 10-20 percent to co-investments.

The vehicle will invest in 10-12 funds, according to a presentation accompanying the press conference, and will focus on mid-market funds investing between €100 million and €1 billion. It will invest two-thirds of its capital in Europe and one third in the US.

Jean-François Dufrasne, managing director of Privilege Access, with whom Edmond de Rothschild has an investment partnership, told Private Equity International that stapled transactions involving existing GP relationships are likely to make up a significant proportion of the fund’s secondaries deals.

The first close on the hybrid fund is expected in the summer with successor funds to be launched every two years.

The firm also announced the launch of a growth-stage tech fund in partnership with London-headquartered Kennet Partners. The fund will seek €200 million for investments in software, cloud computing, artificial intelligence and other high-tech industries. This is the first fund launched by this partnership.

Edmond de Rothschild PE will also seek €250 million for a luxury hotel fund, €100 million for a pan-European value-added real estate fund and €200 million environmental for an infrastructure fund, which will invest in energy transition and waste management projects, were also announced at the press conference.

The firm has partnerships with 10 autonomous investment firms, each with different niche strategies. Four are focused on buyout, growth and venture capital, two on frontier markets and six on real assets.

Among the more unusual partnerships are Moringa, which raised an €85 million fund to invest in frontier market agroforestry, and Ginkgo, which focuses on soil remediation, and the clearing of industrial sites for real estate development. The firm, in partnership with Edmond de Rothschild, raised €160 million for the strategy in 2016 and will launch a UK-dedicated fund this year.

The firm plans to raise an additional €2 billion over the next three years across various strategies. Targets for these funds are yet to be determined.

Edmond de Rothschild Private Equity has €2.3 billion in assets under management and around 100 investment professionals across five continents. Founded in 1953 and managed by Ariane de Rotshchild, its umbrella group has €156 billion in assets under management.