ShaPE to sell CHF51m in fund interests

The Switzerland-listed fund of funds is selling its stakes in seven private equity funds in order to free up cash for capital calls and further fund commitments.

ShaPE Capital, a Swiss-listed fund of funds, will offload seven fund interests before the end of the year at “a substantial discount”. The firm said the action will result in increased “freedom of flexibility”.

ShaPE will sell four stakes in older, smaller and mostly fully funded vehicles as well as three larger 2007 and 2008 vintage funds. The firm said that more details will be revealed once the transaction is complete.

This year ShaPE has made commitments to seven funds, including Advent International GPE VI, Nordic Capital Fund VII and Bain Capital Europe Fund III. The transaction, which the firm hopes to close by the end of 2008, will relieve ShaPE of CHF40 million (€26 million; $33 million) in uncalled fund commitments.

As of June 2008, ShaPE had CHF197 million in unfunded commitments and it currently has a net asset value of CHF243 million.

The transaction will cut the fund's total exposure – including both net asset value and unfunded commitments – by 12 percent, which would equate to around CHF51 million, ShaPE said.

ShaPE's share price has been hit hard in 2008, like the majority of its publicly-listed private equity peers. In October alone, while public markets fell by 17.6 percent, the two listed private equity indices – the LPX 50 TR and the LPX Indirect – fell 24.5 percent and 35 percent respectively.

The secondaries market – which many practitioners have been expecting to grow significantly in light of the credit crunch – has seen several new entrants in the last two weeks. Two heavyweight limited partners – Harvard Management Company and The Wellcome Trust – revealed  intentions to unload $1.5 billion and £3.7 billion respectively, with Wellcome saying that as well as selling it is actively looking to make investments in the direct secondaries market.

Last week Castle Private Equity, another Switzerland-listed fund of funds, decided to postpone a planned listing on the London Stock Exchange due to volatility in the public markets.