DB Private Equity closes $614m secondary fund

Unlike its predecessor fund, DB Secondary Opportunities Fund II targeted US investors, which make up 40% of the fund commitments.

DB Private Equity has raised $614 million for its DB Secondary Opportunities Fund II, according to a statement.

DB Private Equity, part of Deutsche Bank’s Assets & Wealth Management division, exceeded its $500 million target.

Unlike its predecessor, Fund II targeted North American investors, which now make up 40 percent of the fund commitments. Another 40 percent came from German investors, while the remaining 20 percent came from Europe, Middle East, Africa and Asia Pacific, a spokesperson said. “We were very pleased with the level of interest we received in [North America],” he said.

DB Private Equity raised 50 percent from institutional investors and 50 percent from family offices and private clients, he added. Both new and existing investors invested in the fund. DB Private Equity declined to comment on specific re-up rates.

The $614 million fund, which is smaller than its $775 million predecessor from 2007, targets a globally diversified set of private equity fund interests, portfolios of direct private equity assets and co-investments alongside private equity sponsors. It is unclear how far the fund is deployed, but according to the spokesperson it is already “significantly invested, mostly in cash flow generative strategies such as LBO and mezzanine globally”.

DB Private Equity said it expects the secondary market to remain attractive in 2013. “Secondaries are driven by sellers globally; however, we are finding that regulatory changes and economic sluggishness seem to be “motivating” European sellers more than in other regions in the world and we think our investment strategy is well positioned to capture these opportunities,” he said.

As of December 2012, DB Private Equity and Private Markets managed €8.5 billion in total assets.  With offices in the UK, Germany, the US and Singapore, DB Private Equity & Private Markets has an investment portfolio of 450 fund interests in 250 general partners in private equity globally.

LPs have been generally supportive of secondary funds recently, with DB Private Equity’s oversubscribed secondary fund as another example of investor interest in the strategy. The aggregate capital raised for secondary funds more than doubled in 2012, according to Private Equity International’s in-house data team. In 2012, $20.8 billion was raised compared to $9.6 billion in 2011.