Pantheon International Participations, a quoted private equity vehicle, is increasing its total commitment to private equity to about £1 billion over the next three or four years.
Its three-year primary programme, its investments in new funds, is the main benificiary with the commitment rising to £600 million
It will also invest between £300 million and £400 million in secondary transactions.
PIP is unusual among private equity investment trusts in investing in both primary and secondary transactions and sees investing in secondaries, alongside the primary programme, as an essential way of mitigating the “J” curve of new funds. The “J” curve means the value of the holding dips in the early years while the fund is being invested and before returns begin to come through.
PIP will focus the majority of its primary investments over the next few years in funds investing in Europe – predominantly in buyout funds of all sizes, with 8 percent going to funds investing in Asia and about 30 percent to the US.
Secondary interests are expected to be dominated, about 75 percent, by US based funds.
Andrew Lebus, managing partner at Pantheon Ventures, PIP’s manager, said the growth in the buyout market related to an increase in the average size of buyouts globally.
He said a greater amount has been invested in such transactions in the last 18 months than in the preceding 18 years. However, even with purchasing power of $1.4 trillion, it remained a small part of global enterprise values exceeding $40 trillion.