Fund sealed with ARCIS

Paris-based secondaries pioneer ARCIS Finance rounded up $100 million in all for its first standalone European offering, split in roughly equal tranches between US and non-US investors.

The first tranche, European Secondary Development Fund (ESD Fund), launched in 1997 and closed in 1998, was raised in Europe and Middle East, with two-thirds coming from institutional sources. The offering was a tri-partite joint venture between ARCIS and sponsors BNP Private Equity and Baring Private Equity Partners.

Pan-European Secondary Development Fund (PESD Fund), targeted at US investors, was launched in 1998 and closed in the first half of 1999, drawing two thirds of its capital from pension funds. PESD Fund has a slightly broader remit than the European vehicle as it takes fund positions as well as making direct purchases, but broadly speaking, the partnerships co-invest pro rata.

The fund, which focuses on the acquisition of Western European assets from primarily European sellers, has deployed approximately 25 per cent of its capital across several investments, including the recent purchase of the entire $30 million asset portfolio of a pan-European development capital fund.

Arnaud Isnard, one of the first movers in the European private equity secondaries market, set up ARCIS in the early 1990s. For the past 14 years, Isnard has been actively involved in managing funds for Venture Capital Fund of America (VCFA), a US secondaries specialist with more than $150 million under management. He is also a partner in Coller Isnard, a joint venture company that raised the ECUI Secondaries Fund, a euro 50 million vehicle, in 1994.

ARCIS acts as European adviser to VCFA, whose focus on US secondary assets complements its own European remit. Isnard says that, by adding a Europe-focused vehicle to its armoury, ARCIS has attained the capacity to address all the liquidity needs of European sellers.

Altogether, ARCIS, advises funds with some $250 million of capital and an aggregate portfolio comprising positions in 110 private equity funds and direct holdings in 50 companies worldwide. The firm has a seven-strong team of investment professionals.