Spanish insurer MAPFRE has announced the launch of a new fund designed to bring together the existing private equity investments of all the companies in the group, as well as those made going forward.
The €250 million fund is being launched alongside financial advisory firms Abante and Altamar.
The fund will be managed by Abante and Altamar will act as the investment advisor.
MAPFRE Private Equity FCR, which has already been registered with the Spanish National Securities and Exchange Commission, will be balanced in terms of risk and return, and will cover various investment periods, company sizes and geographical regions, though will be concentrated in the US and European markets.
“These alternative investments allow us to diversify our balance sheet in a climate of low interest rates, and also tend to be less sensitive to market developments, which provides protection against sharp declines such as those we have seen recently. In addition, the market moment is very attractive because great opportunities can be generated in the coming months,“ said José Luis Jiménez, Group Chief Investment Officer at MAPFRE.
It is an evergreen vehicle — a type of fund that meets the needs of the insurers as well as other institutional investors, as the nature of their business activities means that they have to invest in very long-term assets.
As a result, it offers other investors the chance to participate thanks to a co-investment model. In contrast with traditional private equity funds, which have an average lifespan of around 10–12 years, this instrument has an unlimited term.