European LP Briefs, June 2010

HarbourVest Pitches Secondary Fund to U.K.

HarbourVest Global Private Equity (HVPE), the listed vehicle of funds-of-funds HarbourVest, is targeting U.K.-based investors with a secondary offering on London’s Specialist Fund Market.

HVPE will not issue any new shares, but it will sell shares from existing shareholders to new investors. The majority (60%) of the vehicle’s shareholder base is currently based in the United States. The aim of the secondary offering is to diversify the shareholder base, provide a trading platform more easily accessible to U.K. investors, raise HVPE’s profile in the London market, and increase liquidity in the company’s shares.

To further encourage liquidity in the shares, HVPE is introducing a “Put Right” to new investors, which will entitle those investors to sell shares back to the company on Nov. 15, 2011 at the lower of the price set in the secondary offering or the estimated NAV per share on Oct. 31, 2011.

HVPE’s unfunded commitments of $605.8 million decreased by $9.7 million during March as a result of capital calls and currency movement. Of the total unfunded commitments, approximately $442.5 million has been committed by HarbourVest funds to underlying partnerships, while the remaining $163.3 million has not yet been committed.

HVPE has a substantial commitment to both U.S. and European venture. As of March 31, its buyout fund commitments increased to 59% of the portfolio (from 58% on Feb. 28), while its venture commitments decreased to 38% (from 39%). U.S. investments accounted for 64% of the portfolio and European investments remained at 27 percent. About 63% of the NAV is in primary partnerships, 19% is in secondary investments and 18% in direct investments.

Among the primary venture commitments in HVPE’s portfolio are Accel Partners, Atlas Venture, Battery Ventures, Bessemer Venture Partners, Index Ventures, Kleiner Perkins Caufield & Byers, Menlo Ventures, New Enterprise Associates, Oak Investment Partners, Pitango Venture Partners, Sequoia Capital, Sofinnova Partners and TA Associates. —Angela SormaniU.K. Pension Fund Recruits Secondary Managers

The U.K. Pension Protection Fund (PPF) will focus on the private equity secondary market in its first foray into the industry.

The £4 billion ($6.1 billion) fund, which manages the defined benefit pension schemes of collapsed businesses, has recruited seven private equity secondary managers to a panel for potential future investment. Goldman Sachs, Hamilton Lane, Lexington Partners, LGT Capital, Partners Group, Pantheon Ventures and RREEF, a unit of Deutsche Bank have been appointed to the PPF panel.

The PPF is recruiting these managers as part of its new statement of investment principles (SIP), which last month announced a 20% (approximately $1.2 billion) target allocation to alternative investments, including private equity (both buyouts and venture), infrastructure and property investments. The PPF also has a mandate to invest around the world. The private equity secondary investments will form part of the alternatives portfolio within the PPF asset allocation.

The fund plans to maintain its low-risk approach to investments, with at least 65% of the portfolio invested in cash and bonds, 20% dedicated to alternatives, and the remaining 10% reserved for public equity.

The total amount allocated to private equity within the alternatives allocation is undisclosed. The managers have been recruited in anticipation of growing opportunities in the secondary market, but no secondary funds have been identified as yet, said a PPF spokesperson. The team is still identifying the best time to generate the highest returns in the sector, he said. —Angela SormaniBrenninkmeijer Family Office to Invest More in PE

The Brenninkmeijer Family Office, which is one of the wealthiest in the Netherlands, is allocating more of its fortune to private equity.

Steven van de Wall, who started at Anthos Asset Management last month, is charged with setting up a private equity portfolio for the Brenninkmeijer family office. Van de Wall was previously head of alternative investments at Delta Lloyd Asset Management, the asset manager for Dutch financial services provider Delta Lloyd Group. He is joined by Maarten Weiss, also from Delta Lloyd, where he was head of fixed income, alternatives and quantitative research.

Van de Wall told VCJ that he and Weiss would manage an undisclosed amount for the family and that the portfolio will be global and broadly diversified by stage.

Anthos Asset Management is the house bank for the Brenninkmeijer family, the Dutch founders and owners of European retail brand C&A. Formerly known as Brenca BV, Anthos used to manage the pension fund assets of C&A and was set up to provide financial services for the family and its businesses.

The Brenninkmeijer family is no stranger to the private equity industry and has been an active investor in Europe and North America for almost 40 years. Cofra Holding is the holding company for the family’s current portfolio of investments located in Europe, North and Latin America, and Asia, whose activities include retail, real estate, private equity and financial services.

Cofra’s investment activity is managed via two companies: Bregal Investments and the Entrepreneurs Fund. Bregal Investments was set up in 2002 and has earmarked over €3 billion for primary buyout fund commitments.

The group has exposure to venture through its Entrepreneurs Fund, a €100 million fund focused on sectors such as life sciences, water technologies, clean automotive technologies and innovative materials. —Angela SormaniAlpInvest Backer PGGM Explores Options

Dutch pension fund PGGM Investments, one of the founding investors of global private equity fund manager AlpInvest, is rumoured to be considering alternative private equity investment opportunities.

For the moment, neither PGGM nor AlpInvest will confirm a change in strategy, but a spokesperson for AlpInvest said that a number of options are being explored by their investors. There has been speculation that PGGM, which manages assets of over €83 billion, may be setting up its own in-house private equity team, a sensitive issue, given that the pension fund set up AlpInvest along with Dutch pension fund APG to manage the private equity portfolios of their pension fund assets.

AlpInvest currently manages over €40 billion of private equity investments globally for APG and PGGM.

A spokesperson for PGGM declined to comment on speculation that the pension fund may set up its own in-house PE team, but said PGGM is continuously in conversation with AlpInvest regarding the group’s strategy and positioning in the private equity market.

APG, which manages pension assets of approximately €205 billion, said it has no plans to change its commitment to AlpInvest as its private equity fund manager.

In 2009, AlpInvest received €5.3 billion of new commitments and further commitments are expected this year, according to the manager.

In terms of venture commitments, exposure is global, with a main focus on the United States and Europe. Some of the venture firms AlpInvest is currently committed to include Abingworth Ventures (Europe), BlueRun Ventures (U.S.), Boulder Ventures (U.S.), Eden Ventures (Europe), Granite Global Ventures (U.S./Asia), Pond Ventures (Europe/U.S./Asia), Star Ventures (Israel/Europe/U.S.), TVM (Europe/U.S.) and Wellington Partners (Europe). —Angela Sormani