Unigestion, the Geneva-based Swiss alternative investment manager, is to advise Germany’s Union Alternative Assets on a private equity fund of funds it plans to launch by the third quarter of this year.
Union Alternatives is a subsidiary of Union Investment, an investment manager owned by Germany’s co-operative banks. In what constitutes its first foray into private equity, it intends to invest up to €150 million and €170 million ($194 million to $220 million) which it hopes will benefit from the current strength of the European buyout market.
German investors have historically found investing in the private equity asset class challenging due to conflicts with the country’s disclosure regulations. However, Union has recently been increasing its exposure to alternative assets, which made up €1.1 billion of €114 billion total assets under management at the end of March.
Stephan Matter, the head of private equity marketing at Unigestion, said in an interview with PEO: “Union has found its other alternative investments to be very successful in the past, and they feel that they should move into private equity as a way of continuing to extend their product range.”
The new fund will invest around 60 percent of its assets in European funds and the remainder in the US.
Matter said that Unigestion expects around 80 percent of the fund to be invested in buyouts, divided roughly equally between large deals and smaller or mid-market ones. The remaining 20 percent will be invested in venture. Although the rest of the world hasn’t been ruled out, this is expected to be focused on the US due to its superior track record as a location for venture capital investor.
For Unigestion, the Union mandate constitutes a significant addition to its asset base. Earlier this year, the group held a €200 million final close of its fourth fund of funds, Unicapital Investments IV. The fund had an original target of €150 million.