A new and X-citing CSR initiative

BEX Capital's Fund III is its first to offer ‘X shares,’ which are exempt from management fees and carried interest for non-governmental organisations and non-profit foundations.

A niche European secondaries firm has introduced a novel take on social responsibility with its latest fund.

BEX Capital, a buyer of stakes in funds of funds and secondaries funds, has scrapped fees and carry for certain limited partners in its third fund of funds secondaries vehicle.

Benjamin Revillon

The firm, which is based in the French Riviera city of Nice, held a one-and-done close on BEX Fund III on $365 million more than triple its €120 million predecessor, according to a statement. The fund closed above its $280 million target and $350 million hard-cap, with 90 percent of Fund II investors re-upping.

The fund is BEX’s first to offer “X shares,” which are exempt from management fees and carried interest for non-governmental organisations and major non-profit foundations. The move should allow such organisations to reinvest their gross return towards good causes. In order to qualify for the carry- and fee-free offer, the non-profits need to adhere to the UN’s Sustainable Development Goals.

It is not clear how much of the $365 million is accounted for by non fee-paying partners, although pfm understands the original intention was to allow up to 10 percent of the fund’s capital to comprise X shares.

“We’re proud to be able to give modest support to our NGO investors by providing them with a return on capital free of charge,” said founder and managing partner Benjamin Revillon in a statement on Thursday. “We hope that this concept of X shares will be replicated by other investment firms as a way to contribute to society and build bridges between finance and the non-profit world.”

The firm also switched to US dollars from euros for its third fund to align the currency of the vehicle with the assets it targets. About two-thirds of the assets the firm buys are dollar-denominated, Revillon told Secondaries Investor in January.

BEX has seven staff and manages more than €500 million in assets, according to its website. The firm relocated to Nice from Paris in the second half of last year.

Toby Mitchenall contributed to this report.