SWISS RE PLOTS US MOVE

The Big Apple beckons for a number of investment professionals at Swiss Re Private Equity Advisers, the private equity fund of funds arm of reinsurance company Swiss Re. The group has unveiled plans to relocate part of its team from Zurich to New York by the beginning of 2005.

The plans were revealed to Private Equity International in an interview with Harold Weiss, head of the fund of funds operation. The New York team will be headed by Peter Von Lehe, who has spent the last five years in Zurich as deputy to Weiss.

Swiss Re Private Equity Advisers currently has 13 professionals, and the plan is for the Zurich and New York investment teams to be roughly equal in size following the relocation exercise. Weiss will remain in charge of the Zurich team.

“We are an international organisation and have completed many investments in both Europe and the US,” said Weiss. “When Swiss Re started investing in private equity [in 1995], the approach was global. But we wanted to get to know each other well before launching an office outside Switzerland, and being together for a number of years has created a culture.”

Swiss Re Private Equity Advisers already has a New York office, but this is currently restricted to administrative functions. Weiss said the New York investment team will initially comprise individuals relocating from Zurich, but additions to the team will be made “as and when required.”

News of the firm's international ambitions coincided with the final closing of its second fund of funds, Swiss Re Private Equity Partners II LP, which edged past a €400 million ($475 million) target with €409 million of commitments. According to Weiss, Swiss Re acted as cornerstone investor and committed around €200 million.

Other mainly Swiss-based investors included Pension Fund Energy, a pension fund for electricity supply enterprises, and ASGA Pension Fund, a pension fund for small and medium-sized Swiss enterprises. Weiss said there were a small number of international investors, but declined to disclose the percentage of total commitments they represented.

The fund will invest in buyout and venture funds in Western Europe and the US. Having launched in late 2002 and achieved a first closing of €180.6 million in March 2003, the fund has already committed over €130 million to 24 private equity funds.

Swiss Re Private Equity Advisers manages commitments of more than €1.7 billion in over 100 private equity funds on behalf of Swiss Re and third parties. It provides a range of private equity products and services including funds of funds and customised managed accounts.

ICG CLOSES EUROPE'S LARGEST MEZZ FUND
Intermediate Capital Group, the listed UK-based provider of mezzanine finance, has closed its midmarket ICG Mezzanine Fund 2003 on €668 million ($825 million). With gearing, the new fund is expected to have cash resources of up to €1.5bn, more than three times the size of ICG's previous mezzanine fund. Twenty-nine investors have committed to the fund, with more than half of them being new investors to ICG. Subscribers include banks, pension funds, insurance companies and funds of funds from Europe, the US and Asia. Commenting on the increased fund, managing director Tom Bartlam said: “We will continue to cover the mezzanine marketplace from mid-market to top level deals. The only change is that we will now be better able to do the bigger deals”.

Since its formation in 1989, ICG has participated in 200-plus deals, arranging more than €4 billion of mezzanine. It currently has a team of 31 professionals across Europe. See also Manager Profile on p. 70.

TDR CAPITAL ‘EXCEEDS’ €500M FUND TARGET
TDR Capital, the UK-based midmarket private equity firm established by former DB Capital executives Manjit Dale and Stephen Robertson in 2002, has announced a final closing “in excess of” its €500m ($605 million) target for its debut fund, TDR Capital LP. TDR said it would continue to focus on European private equity investments of between €25 million and €75 million in companies across all sectors with enterprise values of between €100 million and €750 million. The first investment from the fund was made in July 2003 when TDR completed the £277 million public-to-private of UK restaurant chain Pizza Express alongside South African private equity firm Capricorn Ventures.

SVIIT CLOSES SECOND FUND OF FUNDS
Schroder Ventures International Investment Trust plc (SVIIT), the UK-listed private equity investor has held a final close of its second fund of funds, Schroder Private Equity Fund of Funds II (SPEFOFII), on €285 million ($343 million). SPEFOFII exceeded its original target of €250 million and also surpassed the amount raised for its original fund of funds, which closed in June 2002 on €242 million and which is now fully invested. The new vehicle has already invested approximately €95 million of the fund, including commitments to Permira Europe III, Abingworth Bioventures and Charterhouse Capital Partners VII. The firm has also announced that it is changing its name to SVG Capital.

LARGEST PORTUGUESE PE FUND RAISES €50M
Explorer Investments, a Lisbon-based private equity firm, has held an initial close on €50 million ($60 million) of its debut Explorer I fund. The fund has a final target of €75 million and aims to hold a final close by November this year. The fund, whose aim is to help Portuguese companies expand into neighbouring Spain, is already twice as large as any previous private equity fund raised in Portugal, one of Europe's least developed private equity markets. The majority of LPs that have committed to the fund have been Spanish savings banks. API, the Portuguese state investment agency has also taken what founder partner, Rodrigo Guimaraes described as a “symbolic” stake in the fund.

ALPHA PLANS EASTERN EUROPE FOF
ALPHA Associates, which manages the former third-party private equity business of Swiss Life, has revealed plans to raise a new fund of funds vehicle to invest in Eastern European opportunities.“We will be very likely to launch a new fund of funds product and we are in early discussions as to the focus of the first product to go to market,” said Petr Rojicek. He added: “Eastern Europe will likely be a priority as there is an appetite to enter this niche market through a fund of funds product.” He said it was “quite possible” that the product would be launched later this year. See also On The Record on page 72.

NEW UK PE FIRM LAUNCHED BY ENTREPRENEURS
UK entrepreneurs James Caan and Tony Sarin have launched a new private equity firm with an initial fund of £30m (€45 million; $55 million). James Caan, co-executive chairman of Hamilton Bradshaw, is the cornerstone investor of the new company, which has raised its initial fund solely from non-institutional investors. The UK-centric fund will focus on business services, including media publishing, telecoms and financial services and has already completed one investment in Resource Partners, a financial resources service company. Following the close of the fund, which is planned to be invested over the next two years, Hamilton Bradshaw will look to raise a further fund, “closer to £100 million” according to Caan, this time involving institutional investors.

AS ONE DUTCH FUND CLOSES, ANOTHER OPENS
Mid-market European private equity firm Waterland Private Equity has announced the closing of its second fund, Waterland Private Equity Fund II on €170 million ($200 million), having exceeded its target of €150 million. The fund, which will focus on investments in the Benelux and Rhineland regions, is significantly higher than Waterland's previous fund, which closed in April 2001 on €50 million and which is now fully invested. The fund's 17 limited partners include the European Investment Fund, JP Morgan Fleming Asset Management, Horsley Bridge International, ATP Private Equity Partners and Delta Lloyd Private Equity.

Also in April, Dutch private equity firm Egeria launched its second fund with a €250 million cornerstone investment from Bregal Investments, the vehicle that invests on behalf of the wealthy Breeinkmeijer family. Egeria Private Equity Fund II is aiming to raise between €400 million and €450 million by the end of 2005. Egeria's first fund was regularly topped up by periodic commitments from the Brenninkmeijer family and the current cost price of the portfolio is around €175 million.