Apax latest to offer dual currency fund

Apax Partners is one of the latest private equity firms revealed to have offered investors a choice in what currency they use to make fund commitments. Last week the firm closed its eighth vehicle with $7.5 billion in commitments, split evenly between US dollars and euros.  

Other private equity firms to have recently offered dual currency funds include D&F Capital's Douglas, which launched a fund last August accepting both RMB and US dollar commitments; and Advent International, which had a final close on $10.8 billion in November, accepting both euro and US dollar commitments, according to a Wall Street Journal report.

The trend is not industry-wide however, as structuring a fund to accept multiple currency commitments incurs additional legal costs. The feature first gained attention in early 2009 when the eurozone crisis threw doubt on the future of the euro, according to legal sources.  

Indeed investor concern over the euro led Apax to offer the dual currency option two months after the fund launched in May 2011, according to a source with knowledge of the firm’s fundraising.

Fund managers may still want to consider dual currency vehicles now that the eurozone appears more stable than it did five years ago, note fund formation lawyers. 

General partners with cross-border investment strategies could avoid making currency conversions when investing abroad if their capital commitments include multiple currencies, for example. 
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