Retail investors have been promised both liquidity and access to a range of private equity schemes when ING Investment Management launches a new listed private equity fund-of-funds offering tomorrow.
The listed fund – ING Private Equity Access Limited (PEAL) – is open until November 5 and aims to raise $120 million from investors in both Australia and New Zealand ahead of a scheduled listing on the Australian Stock Exchange on November 25.
“We have been conscious that it has been difficult for smaller investors to get fully diversified access to private equity as there are a number of small retail offerings but none of them have adopted a fund of funds approach,” ING PEAL managing director Jon Schahinger says.
The fund will initially allocate 100 per cent of the capital raised to a defensive high yielding portfolio consisting of listed equities and cash, ahead of seeking to commit the majority of the funds to private equity over an 18 month period, Schahinger says.
The long-term allocation will be around 90 per cent in private equity and 10 per cent in listed securities and cash.
“We’ve been working with intermediaries and advisers over the past year or so to come up with a structure that we believe will best suit their clients,” Schahinger says.
According to Schahinger, once fully invested, PEAL will seek exposure across all stages of private equity investment with the aim of developing a well diversified portfolio of at least 10 underlying managers.
To date ING has managed two private equity funds – the ING Private Capital Funds 1& 2, which collectively have $270 million in funds under management – but these have been for institutional clients.
Under the terms of the offer, investors can purchase stapled securities at $2 per security, with each security consisting of two shares and an option to subscribe for a share at an exercise price of $1.
On October 31 2005, the stapled securities will ‘unstaple’ and trade separately on the ASX.
