Compass returns to market

Compass Partners, a London-based private equity firm, will return to the market to raise a new fund following the sale of Eco, a heat-transfer coils and coolers maker, to Finnish industrial components group Luvata.

Steven Waters, partner and co-founder of Compass Partners, said that the Eco sale was at 10 times Ebitda and “a very good multiple”, enabling the firm to return more than US$1.15bn to investors, having raised US$917m in 1999.

The fund has an overall IRR of 117% to date and a 1.2 times money multiple, with three companies still to be realised: fitness club Elixia, human resources business Drake Beam Morin and Swiss fan maker Fläkt Woods. The fund invested in nine businesses in total.

Waters said that Goldman Sachs has been hired to carry out a “realisation event” for Fläkt Woods but gave no further details. He added that Compass expected to raise a similar amount – US$1bn is likely – but would concentrate on gaining mandates from its private network of investors before hiring a placement agent.

Waters said that Compass, which lost two of its founding partners in 2002 to set up Stirling Square Capital Partners and operating partner Ken Hanna in 2004 when he became chief operating officer of Cadbury Schweppes, was likely to expand its team in the run-up to the fundraising.