Pantheon Ventures, the UK-based fund of funds manager, has acquired the majority of Swiss Life’s private equity portfolio. The deal includes interests valued at around CHF400 million (€258 million; $320 million), plus outstanding commitments to the portfolio of a further CHF300 million.
The deal is part of Swiss Life’s strategy to divest its private equity assets. “Private equity investments are by their nature very illiquid, tying up a high amount of risk capital. For that reason, paired with an attractive offer, we decided to further reduce our share in private equity investments within the framework of our asset and liability management concept,” said Martin Senn, chief investment officer of Swiss Life.
Swiss Life said the transfer of the assets would commence during the fourth quarter of 2004 and the final financial impact of the sale would be known in the first quarter of 2005.
Following the sale, Swiss Life’s private equity portfolio will comprise CHF114 million worth of assets, plus outstanding commitments of CHF59 million. The portfolio mainly comprises fund of funds investments. Swiss Life said it would re-invest the proceeds from the sale in other asset classes.
In a statement released by Pantheon, the firm said the transaction involved over 40 geographically diversified private equity funds and a small number of direct investments. Approximately 50 percent of the portfolio is focused on the US, 40 percent on Europe and the bulk of the remaining ten percent on Asia.
The firm added that Pantheon International Participations (PIP), the London quoted investment trust managed by Pantheon Ventures, was contributing £60 million to the transaction alongside “other funds managed by Pantheon”, including the $909 million Pantheon Global Secondary Fund II, the firm’s second global secondaries fund which closed in July 2004.
“We are delighted with this transaction, which will add a significant collection of diversified, high quality assets to PIP’s existing portfolio,” said PIP chairman Tom Bartlam.
Since early 2004, Pantheon has been the global private equity fund of funds business of Russell Investment Group, the global multi-manager investor.