Schroders Capital raises $2.6bn in private equity direct and co-investments

Schroders Capital, the leading $97.3 billion private markets business of Schroders Group, has achieved a significant fundraising milestone, successfully raising over $2.6 billion for direct and co-investments in private equity since January 2022, most recently driven by the successful €400 million close of one of its leading European buyout funds, Schroders Capital Private Equity Europe Direct III.

This feat reinforces Schroders Capital's position as a key participant in small to mid-sized buyouts which have, crucially, delivered robust returns on behalf of its clients.

Europe Direct III has garnered strong support from a diverse group of global investors, including both existing clients and new investors, spanning pension funds, insurance companies, endowments, foundations, and family offices.

The fund has seen strong fundraising momentum with clients increasingly looking to benefit from the high growth potential of European SMEs. The firm's investment approach, successfully implemented for two decades, is focused on delivering business transformations with low financial leverage. Schroders Capital successfully sold PSS, Olink and Intellera over the past nine months and generated more than 8x in aggregate on invested capital^[1].

A key success story for Schroders Capital is Olink, a significant player in the life sciences sector based in Sweden. Over the course of Schroders Capital's ownership, the company made extensive investments in R&D and launched new proprietary technologies, expanding the company's potential market. The investment into Olink was alongside Summa Equity, a leading purpose-driven thematic investment firm. The subsequent exit, which took place in July, represented the largest liquidity event for Schroders Capital from a private equity investment, culminating in proceeds of more than $325m at exit.

Operating with diversified teams across strategic locations, Schroders Capital benefits from a global reach. Leveraging its diverse investment opportunities, the company offers an attractive portfolio extending across different geographical regions^[2].

Richard Damming, Head of European Private Equity Investments at Schroders Capital, said:

"We are extremely grateful for the continued trust and support from our global investor base. The successful closing of Europe Direct III is a testament to our team's dedication and track record of creating value for our investors.

"We're pleased with the growth we've seen in direct and co-investments. Our strong track record, industry expertise, and global reach position us to continue offering attractive investment opportunities to our clients."

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Schroders Capital Private Equity Europe Direct III was available to investment advisors and professional investors only in Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, Switzerland, and the UK.

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Past performance is not a guide to future performance and may not be repeated. Investments involve risks. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

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Issued in January 2024 by Schroders Capital, Affolternstrase 56 Zurich, Switzerland , authorised and supervised by the Swiss Financial Market Supervisory Authority FINMA, Laupenstrasse 27, CH-3003 Bern.

Risk considerations:

Capital loss risk: The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

Market risk: Market risk is the risk of investment losses due to negative effects of the capital markets on the overall performance of the fund.

Credit risk: The fund will have an investor commitment/draw-down funding model which exposes the investment vehicle to the credit risk of its investors. If an investor fails to comply with a drawdown notice, the investment vehicle may be unable to pay its obligations when due.

Liquidity risk: Given the illiquid nature of private equity investments, investing in private equity are subject to asset liquidity risk. This liquidity risk is a result of the likelihood that a loss from current net asset value would be realized if an asset in the fund needed to be sold quickly in the secondary market to meet the obligations of the fund.

Currency risk: Investments in companies or instruments which are denominated in currencies other than the fund's respective currency expose the fund to the risk of losses in case foreign currencies depreciate.

Counterparty risk: The target investments may utilize derivative instruments for currency hedging purposes, which expose the fund to the risk of a counterparty defaulting.

Operational risk: Operational risks are risks of loss resulting from inadequate or failed internal processes, people and systems, or from external events conducted by Schroders Capital and the managers the fund will invest alongside.

Schroders Capital

Schroders Capital provides investors with access to a broad range of private market investment opportunities, portfolio building blocks and customised private market strategies. Its team focuses on delivering best-in-class, risk-adjusted returns and executing investments through a combination of direct investment capabilities and broader solutions in all private market asset classes, through comingled funds and customised private market mandates.

The team aims to achieve sustainable returns through a rigorous approach and in alignment with a culture characterised by performance, collaboration and integrity.

With $97.3 billion (£77.0 billion; €90.8 billion)* assets under management, Schroders Capital offers a diversified range of investment strategies, including real estate, private equity, secondaries, venture capital, infrastructure, securitised products and asset-based finance, private debt, insurance-linked securities and BlueOrchard (Impact Specialists).

*Assets under management as at 30 June 2024 (including non-fee earning dry powder and in-house cross holdings)

Schroders plc

Schroders is a global investment management firm with £773.7 billion (€912.6 billion; $978.1 billion) assets under management, as at 30 June 2024. Schroders continues to deliver strong financial results in ever challenging market conditions, with a market capitalisation of circa £6 billion and over 6,000 employees across 38 locations. Established in 1804, the founding family remains a core shareholder, holding approximately 44% of Schroders' shares.

Schroders has benefited from a diverse business model by geography, asset class and client type. It offers innovative products and solutions across four core businesses; Public Markets, Solutions, Wealth Management and our private markets business Schroders Capital. Clients include insurance companies, pension schemes, sovereign wealth funds, high net worth individuals and foundations. Schroders also manages assets for end clients as part of its relationships with distributors, financial advisers and online platforms.

Schroders aims to provide excellent investment performance to clients through active management. It also channels capital into sustainable and durable businesses to accelerate positive change in the world. Schroders' business philosophy is based on the belief that if we deliver for clients, we will deliver for our shareholders and other stakeholders.

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^[1] Past performance is not a guide to future performance and may not be repeated.^[2] Diversification cannot ensure profits or protect against the loss of principal.

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