SL Capital’s SOF III set for Q4 close

The fund is targeting $400m to invest in less competitive areas of the market, such as secondaries funds and funds of funds.

SL Capital Secondary Opportunities Fund III (SOF III), SL Capital Partners’ latest dedicated secondaries fund, is expected to close in the fourth quarter of this year, Secondaries Investor has learned.

The fund is targeting $400 million, according to data from Private Equity International, and will focus on niche areas of the market including stakes in funds of funds and secondaries funds.

SOF III hit first close on $213 million in October 2016, having launched that April. Investors in the fund include the San Bernardino County Employees’ Retirement Association with a $25 million commitment and Cumbria Local Government Pension Scheme with £25 million ($32.2 million; €27.5 million), according to PEI data.

The fund is expected to generate a net internal rate of return of 17 percent over the life of the fund, according to an investment due diligence report by NEPC Investment Consulting presented to SBCERA on 12 April.

The fund has a 10 percent carried interest rate and a 10 percent hurdle rate. SOF I and II had higher hurdle rates, at 14 percent and 12 percent respectively, according to the document.

Predecessor fund SOF II closed in May 2015 on $291 million, above its target of $200 million, after less than 12 months in the market. It is around three-quarters deployed, Secondaries Investor has learned.

SL Capital declined to comment.