BC Partners ramping up for next fundraising

BC Partners is in pre-marketing mode for its ninth fundraising, which is likely to be in full swing by the middle of next year.

A spokesperson for the firm declined to comment on a target size. The firm raised over €5.5bn for its eight fund, BC European Capital VIII, in 2005, which at the time made it the largest European buyout fund. Raised in less than five months, the fund was heavily oversubscribed. Investors in previous funds supplied 90% of the capital.

In anticipation of the fundraising, the firm has ramped up its investor relations capabilities to create a seven-strong team. Most recently, Laura Coquis and Laurent Donin de Rosiere joined the firm. They report to Charlie Bott, who joined the BC investor relations team earlier this year and will be replacing Kevin O’Donohue as head of investor relations when he retires at the end of this year. Coquis joined from Atlantic-Pacific Capital where she was a principal in fund formation advisory and project management, responsible for designing and implementing private equity fundraising strategies. De Rosiere joined from Citigroup where he was a director in the Citi Alternatives Distribution Group, focusing on investor relationships in Europe.

Established in 1986, BC Partners has backed over 70 companies in the European buyout market with a total enterprise value of €66bn. The firm has offices throughout Europe and also in New York.

According to a BC Partners spokesperson, BC European Capital VIII is approximately 70% committed, with a current value of 1.2X invested capital, and two limited partners that spoke to EVCJ said the BC Partners portfolio looks to be in good shape. The fund’s most recent deal, the US acquisition of STI from Riverside and Primus Capital was announced last month. Dallas-headquartered ATI operates 24 career training centers located in Texas, Florida, Oklahoma, Arizona and New Mexico serving 15,000 students.

Still, BC Partners may not have quite as easy a time fundraising this time round. Last year, the firm lost its chairman, Jens Reidel, who had been with the firm since 1992. He was replaced by co-chairs Francesco Loredan, who is based in Geneva, and New York-based Raymond Svider.

According to one investor, BC Partners has also in the past relied on some big-ticket investors, who this time may not re-up. And so in addition to tough market conditions the team may have the added complexity of attracting a new investor base to the fund.

This may be a challenge others going out to fundraise may also face, according to Coller Capital’s latest Global Private Equity Barometer Winter 2009-2010, which reveals over three quarters of the 108 limited partners surveyed will refuse re-ups for new funds in 2010 due to concerns about inadequate GP reporting, fund terms and conditions and perceived conflicts of interest.

A sure sign that a buyout fund is about to embark on a fundraising is a spate of disposals and BC Partners has certainly made a mark with the recent announcement of its sale of Unitymedia, reportedly the largest private equity exit in Europe this year. International cable operator Liberty Global has agreed to buy Unitymedia for US$3bn.

Unitymedia was bought for €1.5bn in 2003. BC Partners owns about 35% of Unitymedia and Apollo owns 31%, with smaller stakes held by various funds and company managers.

BC Partners is also looking to float three of its top-performing companies, global travel booking firm Amadeus, German chemical distributor Brenntag and Italian care home provider Medica.

According to data provided by Thomson Reuters, past performance should stand the firm in good stead on this fundraising with both the 1998 vintage BC European Capital VI and 2000 vintage BC European Capital VII achieving investment multiples of 2.73 and 2.07 respectively.