LGT ahead of schedule with secondaries fund
A Swiss-based private equity fund of funds has taken just four months to reach an initial close on a new secondaries fund, despite tough conditions for attracting money, demonstrating the strength of demand among investors for second-hand private equity assets.
LGT Capital Partners has raised $268m (€189m) for Crown Global Secondaries II, according to a statement.. LGT has committed $50m of its own money to the fund, which has a $750m target and no upper limit, according data provider Preqin.
Tycho Sneyers, partner at LGT, said: “With a target of $750m, we are raising a mid-sized secondary fund which allows us to be very selective and focus on those transactions where we have proprietary insights.”
Crown Global Secondaries II follows LGT’s previous secondaries fund, Crown Global Secondaries, which closed on $256m in 2004. A spokesman for Preqin said the firm has deployed almost all of the fund’s capital.
The first close, which enables a vehicle to start investing while still fundraising, comes as other private equity funds take much longer to reach their targets.
Figures from Preqin show firms took an average of 18 months to finish fundraisings in the first half of the year, up from 15 months last year.
If LGT kept up its fundraising pace, it would reach its target in seven months.
The secondaries market, in which firms buy unwanted commitments to private equity funds, has become more attractive to investors during the credit crisis because of the large discounts in the market. The discounts have arisen as investors in buyout funds have come under increased pressure to create liquidity by selling commitments.
US fund manager Paul Capital Partners last week hired a nine-strong team to target secondaries deals and last month sovereign wealth fund Korea Investment Corporation hired Switzerland-based asset manager Partners Group to oversee its foray into the secondaries market - a sign that non-traditional secondaries investors have grown more attracted to the sector.
--write to jbollen@efinancialnews.com
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