Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme

The firm expects its 2024 AVP to be larger than its 2023 fund, having raised a larger fund each year since the inception of the programme, said Yap. "We are now looking ahead to build out our pipeline of opportunities for the 2024 Fund with the 2023 Fund being fully allocated,” she said. The strategy will continue its mid-market buyout focus, primarily in buyout and growth. It will have a “strong tilt” towards North America, complimented by Europe and Asia, she added.

Fellow AVP co-manager Mat Powley told Unquote in November 2022 that the firm was planning to raise its largest ever PE programme in 2023, having raised USD 120m for its 2022 Fund. The firm has now raised USD 130m for the 2023 Fund, it said in a press release issued yesterday (4 September).

The 2023 fund is continuing the firm’s existing PE approach, investing in a maximum of eight managers per year on a global basis. “We build relatively concentrated annual funds which will primarily be re-ups to existing managers and at least one new manager relationship each year,” said Yap. In the current vintage, the firm has added one new relationship with a US manager whose fundraise was “well oversubscribed” with a “one-and-done close” in 2023, she said.

Self-funding programme
By pacing themselves through each yearly fund with Stonehage Fleming’s guidance, the AVP should allow the families taking part to reach a “self-funding inflection point” by years seven to eight of their participation, meaning that the distributions from mature vintages should fund their fresh commitments, Yap said. At this stage, no new capital is required, with returns compounding over time, she said. “This has been one the key drivers of growth for our programme with existing families continuing to either maintain or step up their annual commitments each year.”

The firm also sees new families joining its programmes each year, Yap said. “We have some with no private equity exposure at all, and their appetite is there to bring it into their multi asset portfolio,” she said. “On the flip side, there are other families who already have private equity exposure, whether it’s within their own family business already, or through direct private equity investments. They view us as the core allocation whilst they continue to do their own direct deals on the side to complement this.”

The investor base has therefore become more diversified since 2016, with its group of backers growing to more than 90 families in 2023, she said. It has also become more international, continuing to benefit from being a “captive team” within Stonehage Fleming, with the firm’s strong network of families. “In addition, we have also had some new families externally join the Annual Vintage Programme outside of these networks,” she said.

The programme is performing well, with its mature vintages already reaching the net TVPI and net IRR targets that the firm set out for realisation, in spite of the fact that they are “not even close to being wrapped up yet”, Yap said. "This reflects an attractive illiquidity premium over public market equivalents,” she noted.

When it comes to distributions, the programme has not seen as significant a slowdown versus the wider market, she said. “This ties back to our mid-market strategy of backing mid-sized businesses with multiple strong exit routes. This has resulted in the AVP continuing to deliver strong exits to both strategic buyers and financial sponsors in 2023.”

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Funds
• Fund-of-funds
• UK / Ireland
• Family Offices