Private Equity News & Analysis

Schroders closes third FoF on €422m

Schroders and SVG Advisers have closed their third fund of funds vehicle on €422m, almost 50% larger than its predecessor vehicle.

-

Fund manager Schroders and SVG Advisers, its investment adviser, have held a final close of their third fund of funds vehicle, Schroder Private Equity Fund of Funds III (SPEFOFIII), on €422 million ($525 million).
 
Marketing for SPEFOFIII began last September and a €167 million first close was achieved one month after mailing the marketing material to prospective clients. At €422 million, the fund is significantly larger than its predecessors, which closed on €242 million in 2002 and €285 million in 2004, respectively.
 
“It’s 50 percent higher than our previous fund,” Sam Robinson, director at SVG Advisers, told PEO. “We started with a target of roughly €300 million and had to slow down our marketing dramatically in the first three months of this year. We had a lot of interest due to the performance of our previous funds, but we had to keep control over the size of the fund and take our foot off the accelerator.”
 
According to Robinson, €180 million of commitments to fund III came from investors in the first and second funds, with the remainder from new limited partners. He added that there was stronger interest than in previous vehicles from UK pension schemes, family offices and charities, with UK investors accounting for over 40 percent of the LP base.
 
SPEFOFIII is expected to make 20 investments in total, and has already allocated €200 million to nine partnerships. Robinson said they were “brand name funds” but declined to name them.
 
The vehicle will follow its predecessors’ strategy of predominantly investing in underlying private equity funds in Europe and North America, with a focus on later stage and buyout funds. As with funds I and II, SPEFOFIII also has the capacity to invest approximately 20 percent in venture capital, and can make up to 10 percent of allocations outside of Europe and North America, according to Robinson.
 
SVG Advisers is the fund investment division of SVG Capital, a London-listed private equity fund manager and the largest investor in funds advised by European LBO firm Permira.