LGT nearly doubles size of latest direct minority stakes fund

Crown Secondaries Special Opportunities III has closed on $3bn ahead of its $2.5bn target.

LGT Capital Partners, the fifth-largest secondaries firm per the SI 50, has nearly doubled the size of its latest secondaries fund focused on acquiring direct minority stakes in private equity-owned companies.

Crown Secondaries Special Opportunities III raised $3 billion and closed above its $2.5 billion target, according to a statement. The fund launched in December 2021, Secondaries Investor data shows.

The fund will invest in direct secondaries transactions, which could be a partial acquisition of a private equity fund’s ownership in a company, follow-on financing to support a portfolio company’s inorganic growth, or buying out existing minority investors, a spokesperson told Secondaries Investor. The fund will also seek out single-asset or highly concentrated continuation fund deals.

Switzerland-headquartered LGT’s predecessor vehicle Crown Secondaries Special Opportunities II closed on $1.57 billion in the first half of 2021 ahead of its $1 billion target, according to Secondaries Investor data.

Fund III’s investors include pension funds, insurance companies, sovereign wealth funds, family offices and endowments, according to the statement.

“After a strong market focus on continuation vehicles, private equity sponsors are increasingly using a broader range of solutions to facilitate liquidity and longer holding periods for their best portfolio companies,” partner Andreas Hellmann said in the statement. “Solutions that provide partial liquidity or follow-on capital directly at the company level are playing a growing role.”

LGT remains in market with its flagship Crown Global Secondaries VI. While the fund’s target size is unclear, the vehicle has secured at least $4.38 billion in commitments, according to Secondaries Investor data. Its Crown Global Secondaries V closed on $4.5 billion in 2021.

The firm recently emerged as one of the lead buyers on one of India’s largest private equity firms ChrysCapital’s roughly $700 million single-asset continuation fund alongside HarbourVest Partners. The continuation fund will house Mumbai-headquartered ChrysCapital’s stake in the National Stock Exchange of India. The deal, which is understood to have been 2x oversubscribed, could be the largest GP-led transaction to come out of the subcontinent, Secondaries Investor reported.

Last year, LGT emerged as co-lead alongside AlpInvest Partners and StepStone on a complex insurance-focused continuation fund deal involving two assets managed by the UK’s Pollen Street Capital.