Portfolio Advisors has hit hard-cap on its third private equity fund, according to a statement from the firm, after more than two years in the market.
Portfolio Advisors Secondary Fund III hit final close on $1.5 billion, above its target of $1 billion, having launched in October 2015, according to data from Private Equity International.
The firm’s previous secondaries fund, the 2012-vintage Fund II, closed below its $1 billion target on $910 million in January 2014, Secondaries Investor reported.
Investors from North America, Europe and South America have committed to PASF III, the statement notes. These include El Paso City Employees’ Pension Fund, which committed $30 million, and Pennsylvania Public School Employees’ Retirement System, which committed $125 million, according to PEI data.
The fund will make equity investments between $5 million and $200 million across as many as 50 deals, according to documents prepared for El Paso City Employees’ Pension Fund, seen by Secondaries Investor in August 2016. No single investment will account for more than 20 percent of the fund.
Around one-quarter of PASF III will focus on venture and growth strategies, 10 percent on distressed or special situations and another 10 percent on “opportunistic strategies based on market dynamics”, the documents note. The fund also offers a 15 percent co-investment allocation.
According to minutes from the January 2017 investment committee meeting of Florida-based Munroe Regional Health System, Fund III aims to generate an internal rate of return of 15 percent to 20 percent over the life of the vehicle by purchasing investments at a discount to face value.
PASF III was the fifth largest secondaries fund in the market going into 2018, Secondaries Investor reported.
Secondaries fundraising hit a record high of $38.3 billion in 2017 and the mean size of fund to hit final close was $1.47 billion, also the highest-ever, according to PEI data.