Close Brothers Private Equity has announced an initial closing of CBPE Fund VI. The fund hopes to raise a total of GBP200 million by September and has already secured commitments of GBP130 million with a further GBP20 million waiting to be confirmed.
The company started raising this fund, its first to include commitments from US investors, at the end of last year. John Snook, managing director, said: “It’s our first time raising in the US and we’re still feeling our way.” Berchwood Partners of New York has acted as placement agent and advisor to the fund (JP Morgan Chase has the same role in Europe.) CBPE VI has succeeded in winning the support of three US investors so far, with hopefully another three to come on board. Snook anticipates building on this American investor base when raising the firm’s next fund.
This fund will continue the investment strategy of the company’s last fund, which raised GBP110 million in 1997. The fund will invest GBP2 million to GBP20 million in transactions of GBP5 million to GBP50 million. CBPE invests in UK buy and builds, IBOs and development capital. Target sectors are business and IT support services, transport and logistics, industrial manufactured products, leisure and tourism.
Of the investors 80 per cent have previously made commitments to other CBPE funds. Investors in this fund include Access Capital Partners, Bank of Scotland, Caledonia, Clerical Medical, Close Brothers Group, Halifax and Lancashire County Council. Snooks said: “We’re pleased to have got where we are with the fundraising- its getting harder.”
Snook believes the market for mid-range buyouts is relatively buoyant and anticipates GBP100 million of the new fund will already have been invested by the final close. Accordingly he expects CBPE will start raising its next fund in 2002. The company recruited two London-based investment managers, Mark Perryman and John Fisher, in February this year to help with the extra workload that CBPE VI will bring. A further team member will be added in the near future, to assist with future fundraising, giving CBPE a total of 13 investment professionals.
The fund has already made six investments totalling GBP60 million. These include the buy-in/MBOs of Hillarys Blinds and Park Resorts (deal value GBP46 million) both announced in May. Of the six portfolio companies four have involved serial entrepreneurs backed by CBPE before.