EUROPE - F&C Asset Management has bought Martin Currie Investment Management's private equity funds business with the aim of developing a significant fund of funds offering for its pan-European clients.
A team of three private equity fund managers, headed up by Harnish Mair, will re-locate to F&C’s Edinburgh office to develop the business.
“We are seeing significant demand from both institutional and retail clients for 'alternative assets' and private equity in particular, said Nick Criticos, head of UK retail and investment trusts at F&C. With around 7.5% of US institutional portfolios invested in private equity but just 3.6% in the UK we believe this is an area set for further expansion as investors seek to diversify and also participate in the strong returns delivered by this asset class.
F&C Private Equity Trust, which will be one of a handful of listed private equitiy fund of funds, will initially be spread across 30 private equity funds and more than 200 underlying investments in Europe, North America and the UK, the firm said.
Willie Watt, CEO of Martin Currie Investment Management, said: Our proactive decision to exit private equity enables Martin Currie to re-double our focus on continuing to grow our core UK and international equities business.”
F&C said the transaction was part of its strategy of developing higher margin product areas.
Separately the Board of Martin Currie Capital Return Trust, currently managed by Mair’s team, has announced it will transfer the investment mandate to F&C on June 20. The Board of Discovery Trust PLC, managed by F&C, has also issued proposals, which have the support of major shareholders, for a voluntary liquidation and transfer of assets to the Martin Currie Capital Return Trust.
Discovery's proposals are expected to become effective in August, when the enlarged trust will be re-named F&C Private Equity Trust PLC. It will become F&C's flagship private equity fund of funds vehicle with assets of more than £90 million. Friends Provident PLC is to become a cornerstone investor in the trust, with a £20 million commitment to new shares.
Through our relationship with ISIS Equity Partners we already have an excellent partner for direct investment in UK private equity opportunities via Limited Partnerships and Venture Capital Trusts, said Criticos. This will be complemented by our move into the private equity fund of funds space which will enable access to global private equity opportunities and a wide pool of private equity talent.
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