Munich PEP woos institutions with third FoF

The fund has already made commitments across seven vehicles, meaning LPs can buy into an existing portfolio.

Munich Private Equity Partners, a Germany-based fund of funds, is seeking institutional capital for its third private equity vehicle.

The firm aims to raise €50 million from European institutional investors for MPEP III, managing director David Schäfer told Private Equity International. This is the first time that MPEP, which launches a fund of funds programme each year, is marketing to third parties.

The new capital would sit on top of an existing €50 million anchor commitment from a fellow Munich-based fund of funds, Schäfer said. This money is almost fully allocated to seven funds.

“We’ll typically have six to seven investments in before we go on the external fundraising tour, which gives investors visibility in terms of the programme,” managing director Christopher Bär added.

“They can look and decide if they like what’s in the portfolio, which reduces the typical blind pool risk you have with most other funds of funds.”

Committing substantial capital before approaching the market enables LPs to buy into an existing portfolio, accelerating deployment and reducing the J-curve, Schäfer said.

MPEP III will target 10 to 14 fund commitments in mid-market buyout funds across North America and western Europe. The firm’s existing GP portfolio includes Carlyle European Technology Partners, Livingbridge and Corpfin Capital, according to its website.

The fund will charge 8 percent carry with a European waterfall for tickets of more than €20 million, Bär said. The firm declined to disclose the management fee.

MPEP II, a 2015-vintage, raised around €90 million largely from Munich’s anchor investor and Belgian bank Degroof Petercam, which manages more than €54 billion for wealthy families, business owners and investment professionals.

MPEP has completed more than 190 fund investments and has €1.9 billion in assets under management.