European LP Briefs, November 2011

Healthy Support from IGC’s Sole Backer

Swedish industrial holding company Investor AB has pumped SEK1.89 billion ($274 million) into newly independent Investor Growth Capital, in which it is the sole limited partner.

The capital will support IGC’s sixth fund, which will focus on expansion stage tech and health care companies in the United States and China.

Though independent, IGC is still owned by Investor AB, which claims half of all exit proceeds; the other half is used by IGC to fund ongoing investments.

In September, IGC sold pharmaceuticals distributor Swedish Orphan to Biovitrum for $500 million.

IGC’s current portfolio, transferred from Investor as part of the firm’s recent spinoff, is worth roughly $1.3 billion and includes online search advertiser Keybroker.

In 2011, IGC invested $100 million in new portfolio companies.

Pension Pot Picks PantheonBayerische Versorgungskammer (BVK), Germany’s largest pension fund, has awarded a private equity mandate to London-based fund of funds manager Pantheon Ventures.

The mandate is in the “hundreds of millions of euros; considerably more than €200 million [$268 million],” according to Carsten Huwendiek, a spokesman for Pantheon.

The account will be run separately to Pantheon’s fund of funds, with Pantheon investing alongside BVK in primary buyout, secondary, growth equity and venture capital funds worldwide.

BVK, which is responsible for the pensions of 1.8 million people in Southern Germany and manages €50 billion (€67 billion) in assets, has been a limited partner in several of Pantheon’s fund of funds since 2007.

ADIA Ponders Private Equity Push

Abu Dhabi Investment Authority (ADIA)—which is one of the largest sovereign wealth funds (SWFs) with an estimated $630 billion in assets—could be about to increase its PE allocation.

Presently, the SWF probably commits between $12 billion and $50 billion to private equity, which amounts to a 2% to 8% weighting within its total asset base (which ADIA does not disclose).

“Discussions are on with some leading players and some not so well known names about allocating more on the private equity side,” a source close to ADIA told Reuters.

Another source described plans to at least double the number of private equity staff at the SWF.

Several of the world’s principal private equity funds are already reported to have held meetings with ADIA regarding its increased allocation.

The Abu Dhabi fund also wants to accelerate infrastructure investment, which currently stands at 1% to 5% of assets under management and includes a stake in London’s Gatwick Airport.

BVCA Proposes Union of LP, EIS Capital

Institutional investors could invest alongside enterprise investment scheme (EIS) and venture capital trust (VCT) money, if a proposal by the British Private Equity & Venture Capital Association (BVCA) is taken up by the U.K. government.

The BVCA has suggested either a new type of fund of funds, or a new form of direct investment fund, to allow traditional limited partners to supplement the relatively limited funding—of up to £1 million ($1.5 million) per year—from individuals taking advantage of EIS tax relief.

British companies often lack sustained financial support because VC funds in the country are insufficiently large, according to the association. In 2010, it reports that VC funding per company in the United States was 5.5 times the amount in the United Kingdom.

However, the BVCA raised doubts over BASIS, a proposed standalone scheme for seed investment, stating that it was important to encourage funding across the lifecycle of businesses rather than just at the startup stage.