LGT targets $2.5bn for fourth global fund – exclusive

LGT Capital Partners is targeting $2.5 billion for its new global secondaries fund, according to a person familiar with the fundraising.

The firm, which is based in Switzerland, launched its Crown Global Secondaries IV over the summer, according to a fund prospectus dated 12 June.

The new fund will have similar terms to its predecessor fund.

From the initial closing date and for the following seven years, the annual management fee will be calculated as a percentage of the subscribed capital, according to the prospectus. Thereafter, the annual management fee will be calculated as a percentage of the net asset value.

The annual management fee will also be differ depending on the size of a limited partner’s commitment.

For investors committing $25 million or more, that fee could range from as low as 0.6 percent of subscribed capital in the first year following initial closing date to 1 percent of net asset value after the seventh year following initial closing date.

For investors committing less than $25 million, the fee could range from 0.75 percent to 1.25 percent; and for investors committing less than $5 million, the fee could range from 1 percent to 1.5 percent.

One main modification in the fourth fund’s terms is that LGT will be allowed to have as much as 20 percent of the fund in stapled transactions, up from 15 percent in its predecessor fund, Crown Global Secondaries III.

LGT closed that fund, which was oversubscribed, in January 2013 on $2 billion, according to a 2013 statement from the firm.

The money came from more than 80 limited partners including pension funds, sovereign wealth funds, insurance companies, endowments and foundations. Half of the investors were based in continental Europe, 19 percent in Asia Pacific, 14 in North America, 12 percent in the UK and 5 percent in the Middle East.

LGT’s third global secondaries fund had invested $1.34 billion, or 67 percent, of committed capital to 51 secondaries transactions in 99 partnerships, mostly buyout funds, including 11 stapled deals, as of 30 June 2015, according to a semi-annual report filed in August.

Nearly 30 percent of the transactions were done in the first half of this year. According to data from the Employee Retirement System of Texas, only 27 percent of committed capital was called as of 31 March.

According to a data from Baltimore Fire & Police Employees’ Retirement System, Crown Global Secondaries III had an internal rate of return of 14.11 percent as of February.

LGT did not return several requests for comment.