GOING GLOBAL – Pension Funds Line Up for New Warburg Pincus Opportunity

July 31, 2000 (PLANSPONSOR.com) - Warburg Pincus is building a new private equity international fund that could be the largest fund of that type ever. The Warburg Pincus International Partners fund is set to close in September at about $2.5 billion, twice the original target.

Investors have already committed $1.9 billion to the fund, with approximately three-quarters repeat  investors of Warburg Pincus, including the pension funds of AT&T, IBM, BellSouth, as well as the states of New York, Colorado, Washington, and Louisiana, according to Bloomberg.

The New York-based private equity partnership, which has invested outside the US since the early 1980s, is turning its attention to European opportunities as returns from US ventures look increasingly vulnerable. 

The new fund will invest 50/50 in non-US companies with the $5 billion Warburg Pincus Equity Partners fund.

“The great change in the last year or so has been the real emergence of local markets,” Douglas Karp, a managing director of Warburg Pincus, told Bloomberg. “Today, you could take a growth company public on Nasdaq equivalents in the U.K., Germany, Hong Kong, Japan, and Brazil.”

Karp estimates the new fund will invest 60% of its assets in Europe, 30% in Asia and 10% in Latin America.
In 1998 the Warburg Pincus Equity Partners fund raised $5 billion, which remains the largest venture capital fund on record, and third-largest private equity fund. 

The new one would be the largest private equity fund focused on international investing, according to Venture Economics and the National Venture Capital Association.

Warburg Pincus will continue to charge 20% of profits in the new fund and a 1.5% annual management fee.

 – Nevin Adams           editors@plansponsor.com