VPEG2 is focussed on providing the majority of its commitments and investments to underlying funds that in turn invest in profitable businesses, with proven products and services, that are at a more mature stage of development, and in particular the Later Expansion and Buyout stages of Private Equity investment.
Furthermore VPEG2 will only invest in funds targeting small to mid market sized investments with an enterprise value of generally between $50m to $500m at investment. It is this segment of private equity investing that has consistently delivered strong returns to investors globally over the past three decades.
In more detail, VPEG2’s investment strategy will evolve as follows:
Primary Private Equity Fund Investments
Following the First Closing Date, VPEG2 will make capital commitments to new (Primary) underlying private equity funds, managed by private equity firms that satisfy Vantage’s investment manager selection criteria and in accordance with VPEG2’s investment guidelines.
VPEG2 will target to commit to a minimum of four, and maximum of eight, Primary Private Equity Fund Investments within 24 months of the Final Closing Date.
Secondary Private Equity Fund Investments
In addition, to further broaden the Vintage Year diversification of its Investment Portfolio, VPEG2 will seek to also invest into existing or Secondary Private Equity Fund Investments, managed by private equity firms that satisfy Vantage’s investment manager selection criteria and in accordance with VPEG2’s investment guidelines.
VPEG2 will target to commit to up to four, Secondary Private Equity Fund Investments within 24 months of the Final Closing Date.
VPEG2 may also take advantage of opportunities granted by an underlying Private Equity Manager to make Co-Investments alongside a Primary or Secondary Private Equity Fund Investments. Up to 10% of VPEG2’s Private Equity Allocation may be allocated for Co-Investments, with no more that 5% of VPEG2’s Private Equity Allocation allocated to any one underlying company investment.
Each Trust to Invest Pro Rata
Each commitment or investment made by VPEG2 to a Primary Private Equity Fund Investment, a Secondary Private Equity Fund Investment or a Co-Investment (collectively Underlying Private Equity Investments) will be invested in, by each Trust, on a pro rata basis across each Investment.
When VPEG2’s Private Equity Allocation is fully invested, a portfolio of up to 50 underlying private company investments could result.
Capital Calls for VPEG2A Investments
Over time and during the term of VPEG2, Capital Calls will be made by Vantage to each Investor in VPEG2A (with more than 8 Business Days notice allowed for payment) with the Called Funds applied towards meeting the call payment obligations for each Underlying Private Equity Investment of the Trust, or to meet working capital requirements of the Trust.
Additional Investments of VPEG2B
Following the First Closing Date the Aggregate Committed Capital of VPEG2B, that is not immediately invested in an Underlying Private Equity Investment will be invested into cash & short term deposit investments with one or more of the Big Four Banks (Liquid Investments).
VPEG2B’s objective in making these initial Liquid Investments is to obtain income and capital stability without sacrificing liquidity. Over time and during the term of VPEG2, amounts will be drawn from the Liquid Investments component of the Investment Portfolio and applied towards meeting call payment obligations for each Underlying Private Equity Investment as they occur, or to meet working capital requirements of VPEG2B.
The net proceeds of VPEG2’s investments in each underlying Private Equity Fund Investment, including proceeds from the realisation or sale of an investment and any dividends or interest received from an investment will be distributed to investors on a pro rata basis within 30 days of receipt.