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Skandia Colombia keeps eye on secondaries

The Colombian division of Skandia Old Mutual isn’t investing in secondaries right now, but anticipates value in the secondaries market going forward.

Skandia AFP of Colombia is a limited partner in several secondaries funds, but isn’t committing to any more funds right now, according to investment manager Juan Daniel Frias.

“We invested in global secondaries funds, but our investment limits are close to being full on committed capital,” Frias told Secondaries Investor. 

Skandia and Colombia’s other pension funds are limited to allocating 5 percent of their assets to international private equity fund managers and 5 percent of their funds to local private equity fund managers with more than $1 billion under management.

There aren’t any secondaries funds in Colombia, but Skandia invested in a few 2010- and 2011-vintage secondaries funds that are managed by well-known global GPs such as Lexington Partners and Neuberger Berman, according to PEI’s Research and Analytics division.

“We want exposure to known GPs because we are still new to the asset class,” said Frias. Colombian pensions were only allowed to invest in private equity beginning in 2005.

Frias also said the secondaries funds in Skandia’s portfolio aren’t performing as well as the primary funds. The returns aren’t as strong as he expected and he hopes they will be better in the future.

“We aren’t doing much in secondaries right now, but we do think there is value in secondaries investments,” Frias told Secondaries Investor.

When Skandia commits to secondaries funds again, it will consider existing relationships as well as new GPs that come to market. Regardless, secondaries will be a smaller part of its portfolio going forward.