Bloomberg.com : Wealth Manager: Investing -
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Published on: 8/17/2001
Last Visited: 10/1/2002
That first BancBoston fund, known as Private Equity Portfolio Fund, or PEP I, was designed to mimic the strategy the bank has been following with the investment of its own money in private equity since 1959, says Rick Fritz, president of BancBoston Capital.PEP I raised $150 million from 174 investors; by the time PEP II closed last fall, it had raised $300 million from 396 investors.Although the investment minimums for these funds were set at the standard industry rate of $500,000, the average "take up" in each was about $1 million, says Fritz.Both funds invest in 40 smaller funds, and about 600 companies from around the globe are represented in the underlying investments.
In a departure from other funds of funds, however, about 15 percent of the PEP funds are allocated to secondary managers--that is, partnerships that have bought investments, typically at a discount--from other venture capitalists.These secondaries are usually about four years into the investment cycle, and their underlying assets are generally more seasoned than those in start-up funds.
A number of other creative methods to give individual investors access to private-equity deals are also being devised.