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Continued selective investment activity
INVESTED IN HIGH CONVICTION INVESTMENTS
NEW PRIMARY COMMITMENTS
Six months ended 31 July 2020
We have continued to commit selectively to top-tier managers through the first half of the financial year. A key area of focus in our selection and due diligence process has been assessing and understanding the performance of managers during periods of significant financial stress. We invested £52m in the six months with 10% of investments into our high conviction portfolio, reflecting the decline in co-investment opportunities and lower levels of deal activity. This compares to £64m invested in the first six months of 2019.
We completed five new primary fund commitments in the six months totalling £35m. These third party fund commitments were raised by managers we have backed successfully before: two European funds (Hg Genesis 9 and Saturn 2), two global funds (CVC VIII and Apax X), and one US fund (Bain Capital Tech Opportunities). The managers we back tend to raise funds which are often oversubscribed and therefore difficult to access to new investors. The calibre of these managers speaks to the relationships which we have built with these firms over many years.
We made the following commitments to funds with investment mandates which are aligned with our long-term strategic objectives as well as a bias towards sectors which are aligned with our defensive growth focus:
- €15m (£13m) to CVC VIII, a European buyout strategy. CVC is one of our longest standing manager relationships
- Two commitments to Hg (Saturn 2 and Genesis 9) totalling £9m. These funds are focussed on predominantly Northern European software and services businesses
- $5m (£4m) to Bain Capital Tech Opportunities, a fund focused on mid-market buyouts and late stage growth capital in technology and technology-enabled businesses, predominantly in North America
- €10m (£9m) commitment to Apax X, a global buyout fund focused on the technology & telecoms, services, healthcare, and consumer sectors.
We will continue to be highly disciplined in our investment approach focusing on high quality, defensive businesses. We remain well placed to take advantage of attractive investment opportunities as they arise.