F&C reaches €30m first close of European PE secondaries fund

The firm has identified the European mid market as currently one of the most attractive areas for private equity investment, claiming that private equity funds in the space can be obtained at below asset value. F&C has acquired €45m of secondary assets since 2004, generating an IRR of 32 per cent for the period to December 2008.

The firm has a history of investment in European buy-out funds, mezzanine and co-investments through listed vehicle F&C Private Equity Trust. The trust’s portfolio of European buy-out and mezzanine investments has achieved an IRR of 24.2 per cent between 2001 and 2008, according to F&C.

The first Aurora fund acquisition was a portion of the private equity interests of troubled Icelandic banking group Landsbanki. The assets include the whole of Landsbanki Private Equity Fund I and a “substantial” part of Landsbanki Private Equity Fund II, representing over €65m of original commitments. F&C will run Landsbanki Private Equity Fund II in partnership with Landsvaki, the asset management arm of state-run bank Nýi Landsbanki (NBI). NBI was set up in October 2008 when the government took control of Landsbanki.

Hamish Mair, head of F&C Private Equity, said, “This transaction represents a welcome opportunity to profit from the credit crisis. The combination of the mid market focus and an attractively priced secondary transaction gives us an excellent prospect of delivering strong returns to the fund's investors over the medium term. The transaction has been complex but we believe it delivers a good outcome for all parties.”

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