Sunday 21 July 2019

Davy taps rising private wealth to raise private equity fund

Brian McKiernan, chief executive of Davy stockbrokers
Brian McKiernan, chief executive of Davy stockbrokers

Gretchen Friemann

Davy has launched a $50m (€42.2m) private equity fund targeted at its client base of well-heeled private investors as the stockbroker moves to tap mounting appetite for the sector amid an increasingly intense global hunt for yield.

News of this latest fund aimed at the booming global buyout industry comes as Bank of Ireland prepares to conclude a €100m fund raise for a new flagship investment fund, which was set up in partnership with KKR, the global buyout firm.

Brian McKiernan-led Davy's smaller offering is a private equity fund of funds, meaning it will deploy money to several buyout firms.

However it is understood the company has singled out Carlyle Group and Blackstone as likely partners.

Davy clients must stump up a minimum $125,000 and sources close to the firm said it is targeting an annual internal rate of return of about 15pc.

As well as a minimum stake, investors must agree to lock-up their money for at least 10 years.

The fund - known as Davy Private Equity Strategies II - is the successor vehicle to Davy Private Equity Strategies I, which raised €60m from high- net-worth individuals.

Davy set a first close on the fund at the end of September and is aiming to conclude the raise in March. While the stockbroker is targeting $50m, there is no firm ceiling on the vehicle, opening up the possibility for a far bigger fund, depending on demand.

One source pointed out the private equity fund of funds vehicle, which has been criticised in some quarters for its multi-layer fee structure, marks an evolution from Davy's pre-crisis era funds, operated by the US based hedge fund run by billionaire, Chase Coleman.

Indo Business

Also in Business