NEW YORK – Investment bank Brown Brothers Harriman & Co. in October hired Wilshire Associates Inc. to manage its new private equity fund-of-funds, BBH&Co. Private Equity Partners II L.P.
The fund, targeted at $100 million to $150 million, launched in September and was expected to hold a first close on about $50 million in mid-November. A final close is slated sometime in the first quarter of 2000 said John Hass, manager of the alternative investments group at Brown Brothers.
Brown Brothers hired Wilshire because although the investment bank has a substantial private equity investment team in place, it does not make venture capital and leveraged buyout investments, two main areas in which Wilshire has expertise, Hass said.
The vehicle will invest about 45% of the fund in buyout funds, 25% in venture capital funds, 15% in international private equity funds and the remaining 15% in Brown Brothers’ own proprietary funds, Hass said.
An eight-person investment team – four executives each from Brown Brothers and Wilshire – will lead the new fund.
The firm decided to create a fund-of-funds to provide its clients – high-net-worth individuals – with access to leading venture capital and buyout partnerships. The vehicle is expected to invest between $5 million and $15 million in about 15 to 25 private equity funds, including Brown Brothers’ own proprietary 1818 Fund family.
Brown Brothers’ $118 million BBH&Co. Private Equity Partners L.P. closed at the end of 1998 and is about one-third invested. The fund was created as a unit of the firm’s institutionally subscribed $554 million 1818 Fund III L.P. to allow non-institutional investors to join the umbrella fund. BBH&Co. expects to make investments of $20 million to $75 million in 12 to 20 portfolio companies with a bias towards the media, telecommunications, health-care equipment and energy industries.