ATP poised to launch EUR 2.8bn fund-of-funds

Following the announcement that the Danish pension fund ATP (Arbejdsmarkedets Tillægspension) was increasing its allocation to private equity from 0.5% to 10% of its DKr 250bn assets under management, the firm has been actively setting up its private equity division and is currently finalising documentation for the launch of its debut fund-of-funds, ATP Private Equity Partners KS. Incorporated in Copenhagen, the fund-of-funds will draw down EUR 2.8bn from ATP over a three-year period before closing. It is then expected that a further vehicle will be raised. ATP Private Equity Partners KS is not open to other institutional investors. Terms and conditions are still being discussed, although it is understood that they will be industry standard. Full launch of the vehicle is expected during Q2 2002, with two or three investments anticipated during the spring. Kromann Reumert in Copenhagen is providing legal advice to the fund management team.

Investors

ATP will commit the full EUR 2.8bn. Capital is to be drawn down on a deal-by-deal basis.

Investments

A flexible guideline has been set out for fund commitments, with 65% of the vehicle earmarked for buyout funds and 35% for venture capital funds. Geographically, 50% of fund commitments will be made in Europe and 50% in the US. Again, this is merely a guideline and is flexible. In addition, due to the firm’s location, investments in Scandinavian vehicles may be heavily weighted by volume. Commitments to funds will range between EUR 10-75m. On top of fund commitments, investment budgets of EUR 30m will be set aside for co-investments in Europe and direct investments in the Nordic region. Co-investments will be made in rounds ranging between EUR 5-25m, while direct investments will be invested in rounds ranging in size between EUR 3-15m. Direct investments will be focusing on all stages, including public-to-private transactions, and sectors such as IT and life sciences.

People

Jens Bisgaard-Frantzen is heading up the private equity team at ATP, which is looking to recruit two new team members to bring it to a total of ten by year-end.

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