INVESCO Preps Flexible Fund-of-Offering

The steady flow of international fund-of-funds offerings throughout 1998 shows no signs of diminishing as yet. As the year end approaches, INVESCO Private Capital – previously Chancellor LGT Capital Management – is preparing to hit the fund-raising trail with a $500 million (ecu 420 million) offering, INVESCO Partnership Fund II. The vehicle is a successor to the $380 million Chancellor Partnership Fund I, raised in 1997 and renamed INVESCO Partnership Fund I following international investment management group INVESCO’s acquisition of Chancellor LGT early in 1998. INVESCO Private Capital also manages a series of vehicles for direct investments, the most recent of which is INVESCO Private Capital III, which raised $330 million in 1997.

The new INVESCO fund-of-funds will offer participants the opportunity to specify the weighting of their commitments across INVESCO Partnership II’s three target investment categories, namely US venture funds; “other US” funds and non-US investments. This “pick-n-mix” facility is similar to that offered by Crossroads Group for its latest fund-of-funds (EVCJ August/September 1998, page 11).

Parag Saxena, head of INVESCO’s private equity division, said the group will recommend that investors without individual weighting preferences allocate 30% each to venture funds and non-US investments and 40% to “other US” investments, which will mainly be buyout funds. Such a spread would be broadly in line with the investment strategy followed by the 1997 fund-of-funds. Western Europe, rather than emerging markets, will be the primary focus for INVESCO Partnership Fund II’s disbursements outside the US.

Until relatively recently, INVESCO/LGT Chancellor’s private equity activities were strongly focused on the US market. Following LGT’s 1996 merger with Chancellor, the group appointed Ray Maxwell as managing director of its European private equity activities and established a London office (EVCJ October/November 1997, page 5). Parag Saxena, Ray Maxwell and a third managing director, Phil Shaw, will manage the new fund-of-funds alongside one further senior investment executive, as yet unnamed.

Further details of the fund-of-funds will be made available following its formal launch.