CASE STUDY
Private Equity Fund of Funds
Italian Pension Fund | Spring 2020
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Private Equity Fund of Funds
Engagement at a glance
An Italian Pension Scheme seeking to allocate EUR 100mn to a private equity solution that would generate a net IRR above 7% per year, investing across private equity primary fund investments, secondaries and co-investments through a Fund of One.
Client-specific Concerns
The investor wanted to ensure a fast pace of deployment - around 40% in year one and 30% in each of the subsequent two years. Investing in a combination of primaries, secondaries and co-investments was intended to facilitate this rapid pace of deployment as well as providing diversification. In addition, while global exposure was targeted, the investor expected at least a 40% allocation to Europe and had a preference for a specific allocation to Italy.
Outcome
- Analysing a large universe of fund-of-fund managers. The broad scope of the mandate, combined with the investment size, provided access to a large universe of Managers with capabilities across the three sub-strategies and well-established fund of funds platforms who were willing to offer the Fund of One solution.
- Sub-allocations to primaries, secondaries and co-investments. Analysis and discussion helped to determine the appropriate sub-allocations across the three areas, based on return targets and preferred deployment speed.
- Understanding local geographic experience. Managers proposed allocations to Italy in order to meet the investor’s preference, but specific analysis was conducted on track records and pipelines in this area to determine whether the approach was viable.
- Well-established platforms. Managers with well-established fund of funds platform were significantly advantaged through this search, providing not just a solution to the investor but key value-added services such as knowledge transfer, development of the client’s in-house capabilities and direct contact with investment professionals across these platforms.
Our specialist says
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Solutions that invest across the spectrum of sub-strategies, in primary fund investments, secondary and co-investments are a great way to gain initial exposure to private equity asset class. Each strategy can provide numerous benefits, from diversification to altering the cash flow profile, with customisation available to meet very specific needs of investors.
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United States, Chicago
220 North Green Street
Chicago
IL 60607
Telephone: (312) 829-4353
Email: info@bfinance.com
-
Canada, Montréal
1250 Rene Levesque Boulevard West
Suite 2200, Montreal
Québec H3B 4W8
Telephone: +1 450 902-4965
Fax: +1 514 393 9069
Email: info@bfinance.com
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Suite 2500, Toronto
Ontario M5J 0B8
Telephone: +1 (416) 560-7275
Email: info@bfinance.com
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United Kingdom
36 Queen Street, London
EC4R 1BN
Telephone: +44 20 7747 8600
Fax: +44 20 7747 8600
Email: info@bfinance.com
-
Germany
Theresienstraße 1
80333 Munich
Telephone: +49 89 55 29 59 00
Fax: +49 89 55 29 59 00
Email: info@bfinance.com
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France
49, Avenue d'Iéna
75016 Paris
Telephone: +33 1 45 02 64 00
Fax: +33 1 45 02 64 01
Email: info@bfinance.com
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Netherlands
Symphony building
Gustav Mahlerplein 3-115, 26th Fl
1082 MS Amsterdam
Telephone: +31(0)20 794 61 00
Email: info@bfinance.com
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Telephone: +61 (0)2 8052 3930
Email: info@bfinance.com
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199 Des Voeux Road Central, Sheung Wan
Telephone: +852 3953 7874
Email: info@bfinance.com