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Coller has secondaries mega fund in sights

Secondaries pioneer Jeremy Coller is targeting almost $4bn for his eponymous firm’s fifth fund after delivering good early returns from his latest vehicle.

Coller Capital, a UK secondaries firm, is looking to raise $3.7bn (€2.9bn) for the largest secondaries fund ever on the back of good early returns from its fourth fund, which closed at $2.6bn in 2002.

According to the US pension fund Calpers’ website Coller’s 2002 fund has a net internal rate of return of 26.5% and is showing a money multiple of 1.3 times the original investment. The site cautions that these returns are not meaningful given the fund’s immaturity. But already they are close to matching the performance of older vintages.

Jeremy Coller, who founded the firm in 1990 declined to comment on the imminent fundraising, which was revealed in Financial News. According to the newspaper, investors say Coller is initially targeting about $3bn ahead of a hard cap of $3.7bn.

Coller Capital has been responsible for many of the milestone transactions of the secondaries market, including acquisition of the Shell US Pension Trust portfolio in 1998 and the NatWest Equity Partners portfolio from Royal Bank of Scotland in 2000 – at the time, these were both the largest secondaries investments that had ever been made.

In 2004, Coller bought Dresdner Bank’s institutional restructuring unit for $90m; and paid about £300m (€431.4m) to buy UK bank Abbey’s portfolio of private equity interests with a book value of £695m.

Last month, New Venture Partners, a venture capital firm supported by Coller, was oversubscribed for its fourth fund that was targeting $200m.

New Venture Partners manages the funds that had been part of the Lucent Bell Labs portfolio Coller bought from the US technology group in 2002.