Madrid headquartered private equity house Altamar are set to launch their eighth fundraising effort, which is being dubbed a “fund of funds.” While the fund will have a hard cap of €500million, sources told penews.com that they would privately be happy with a €400million fundraiser.
The purpose of this fundraiser isn’t in any way specific, with Altamar preparing to distribute the money to global private equity funds, secondaries, and other areas. Altamar are currently involved in relationships with some of the biggest private equity houses in the world, including Hg Capital and Ares Management, with in excess of €1.5billion in managed assets worldwide.
While Altamar undoubtedly have an ambitious plan to raise this large amount of capital and distribute it to the areas they feel represent good opportunities, their aim to raise a fund of funds goes against recent industry trends.
Preqin data revealed that fund of funds initiatives raised a total of only $13.3billion in 2013, which was the lowest figure since 2004, when $21billion was raised in this manner. Although the industry in general has been struggling in this area, there have been a number of individual stories of success from fund of funds initiatives, with LGT Capital Partners raising €900million in a fund that closed in December 2013.
It is unknown how long fundraising for this fund of funds will remain open, although the rest of the private equity industry is likely to be paying attention to see how Altamar performs.
At the same time, investors could be preparing to hold onto their cash until later in the year, though it is possible they might also see Altamar as an early opportunity to capitalise on such a fundraiser.
Altamar’s current lack of clarity around where they intend to invest could prove problematic, however, with investors increasingly looking for more certainty around deals before parting with their own cash.