Last year, Robeco Private Equity was launched as the Netherlands’ first listed private equity fund of funds. Currently some 30% of Robeco Private Equity’s fund assets are invested in private equity. This is because it takes several years to set up a private equity fund of funds.
Currently some 20% of Robeco Private Equity’s fund assets are invested in listed private equity funds. Furthermore, Robeco Private Equity has committed 80% of its assets to Robeco Global Private Equity C.V. In time, this commitment will be called up by the C.V. on a ‘just-in-time’ basis, meaning that the C.V. will not call up the cash until the underlying unlisted private equity funds are ready to apply this cash to investments in unlisted companies.
Given the current economic circumstances, it is no surprise that the rate at which investments have been made has been somewhat slower than expected. Currently the C.V. has entered into commitments with unlisted private equity funds to a value of 60% of its total available assets. 20% of these commitments have actually been called up, as a result of which Robeco Private Equity’s exposure to unlisted companies via the C.V. is some 10%. Together with the 20% invested in listed private equity funds, actual assets invested thus amount to some 30%. However, it is still expected that the assets invested will amount to some 80% in two years’ time.
This scenario was anticipated when the fund was started. For this reason, Robeco Private Equity indicated it also intends to invest in listed private equity funds when the fund was issued last year, as this will allow the intended exposure to private equity to be realized sooner. However, the general economic climate deteriorated quickly after the issue, and the valuation levels of listed private equity funds did not adequately reflect this development. Therefore it was decided to wait for prices to decline before investing significant amounts of cash. Currently, we think that valuation levels have become more realistic, so we are now slowly expanding the portfolio.
However, it is unlikely that more than 40% to 50% will be invested in listed private equity funds, as Robeco Private Equity has a fixed commitment of 80% of its assets to the C.V. The fund needs to have sufficient means at its disposal to meet this obligation.
In spite of the current market conditions, Robeco has decided to issue a second tranche. This decision was made because it will offer a final possibility for Robeco Private Equity to participate in Robeco Global Private Equity C.V., which will soon be closed to new participants.
(source: Robeco Group)
