Independent asset manager Dunas Capital has launched the Rainforest Dunas Iberia Fund I FCR, the first private equity fund of funds that will invest exclusively in Spanish and Portuguese GPs.
The fund of funds manager will look for investment opportunities in buyout and growth capital funds but will also have some flexibility to invest in venture capital, private debt, infrastructure and special situations. With a target size of EUR100 million, Rainforest Dunas Iberia Fund I FCR plans to start making commitments to Iberian private equity firms in the next few months.
The fund is managed by Inverseguros Gestión, which is part of the Dunas Capital Group, and BNP Paribas acts as depositary bank.
Rainforest Dunas Iberia Fund I FCR will have an investment committee that, together with the investment analysis team of the Dunas Capital Group, will make the investment decisions of the fund of funds. In this way, Dunas Capital Group’s clients will have the opportunity to diversify their portfolios with relatively accessible commitments compared to other private capital funds.
The launch of this vehicle demonstrates once again Dunas Capital’s capacity to innovate with the creation of a product that is able to generate attractive returns with moderate risk in a context of low interest rates. As a result, Rainforest Dunas Iberia Fund I FCR will allow institutional investors and high net worth individuals to access these strategies in alternative assets.
David Angulo, chairman of Dunas Capital, says: “In the current environment of historically low interest rates investors are looking to increase their allocation to innovative assets that are uncorrelated with stock market fluctuations. Rainforest Dunas Iberia Fund is the latest addition to a broad range of products that Dunas Capital offers to investors to diversify their portfolios with the type of assets they are looking for”.
Jorge Viera, partner of Dunas Capital Group in the project, says: “Entry barriers to invest in private capital are usually very high. With this project, the Dunas Capital Group aims to lower those barriers and mitigate risk by offering access to a private equity portfolio diversified by managers and vintages”.
Spanish GPs have been long calling for national investors to increase their allocations to private equity. Only 40 per cent of the money raised by Spanish private capital firms in 2017 came from national investors, according to Spanish private equity trade body Ascri. The same source indicates that Spanish pension funds invested only EUR54 million (2.89 per cent) of the EUR1.86 billion raised by Spanish private capital firms last year, and insurance companies EUR67 million (3.59 per cent).
These commitments are far below the allocations of their European peers: insurance companies invested 8 per cent of the EUR91.9 billion raised by European private capital firms in 2017 and pension funds 29 per cent, according to European private equity trade body Invest Europe.
The fund has been registered in the Spanish Securities Market Commission (CNMV). Baker McKenzie advised on the creation of Rainforest Dunas Iberia Fund I. Deloitte audits the vehicle and Rainforest Capital Partners will act as a commercial agent for the fund of funds.
