Foreign & Colonial Investment Trust, a UK growth investment trust, will expand its exposure to private equity with an annual target of £75 million (€110 million) per year.
“We started with five percent to get used to private equity and get some exposure,” said Jeremy Tigue, fund manager at F&C Management. “Everything has worked out well so far and we wanted more exposure to this asset class. The general feeling is that private equity as an asset class is going to keep growing for several years to come, so it made sense to have more money allocated to it.”
As part of the change in strategy, Foreign and Colonial Investment Trust has committed to funds investing principally in Asia: $50 million to funds managed by Pantheon, a London-based fund of funds manager, and $25 million to HarbourVest, a US-based fund of funds and secondaries specialist.
Tigue said that the trust has had a broad strategy so far, but will increase its focus on funds investing in the emerging Asia markets. “We’ve tried to spread the net as wide as possible so far as we didn’t want to over concentrate on a particular area. When we started, we concentrated on the US, the UK and Europe. In 2002, we thought that Asia was too risky as it hadn’t developed enough and lacked a track record. Now, however, we are more confident in the region and so we wanted more exposure.”
Tigue said that the trust’s private equity investments returned £8 million in the first half of this year and approximately $2.5 million in 2005.