Doughty Hanson & Co will list Doughty Hanson & Co Investments L.P. Incorporated, on Eurolist by Euronext.
The publicly-listed vehicle will invest primarily in Doughty Hanson’s private equity, real estate and technology funds as a limited partner, make co-investments alongside Doughty Hanson’s portfolio and real estate holding companies and make other opportunistic investments as identified by Doughty Hanson.
The group will seek to raise €1 billion through the offering, with an over-allotment option of 15%. Doughty Hanson will commit €40m in cash to the vehicle but a substantial part of the this commitment will be used to absorb costs of the offering in exchange for options, which helps to alleviate the impact of issue costs on NAV.
The vehicle’s primary objective will be to achieve long-term growth in value for its unit-holders by investing in funds and portfolio companies managed by Doughty Hanson.
The offering is a partly-paid structure, for example, 60% of fully-paid price of units will be paid at the time of IPO and 40% to be paid after 12 months. No vehicle level management fee will be payable to Doughty Hanson for the first two years and no carried interest will be payable to Doughty Hanson until NAV growth covers the formation costs in excess of those paid by Doughty Hanson. The carried interest is subject to an 8% hurdle rate and 25% of the carried interest payable to Doughty Hanson by the publicly-listed vehicle will be reinvested in units in the publicly-listed vehicle.
At least 80% of the proceeds of the Offering will be invested in Doughty Hanson’s funds and in co-investments in Doughty Hanson’s portfolio companies and real estate acquisitions. Up to 20% may be invested in opportunistic investments, such as minority investments in mezzanine facilities made available in connection with Doughty Hanson’s acquisitions and other opportunistic investments which are outside the criteria of the existing funds
Through its existing private equity funds, with total commitments of over $5 billion, Doughty Hanson has completed 50 leveraged buy-outs of companies, including such internationally recognised brands as TAG Heuer, Geberit, Tumi and RHM.
In addition, Doughty Hanson sponsors two European real estate funds with over US$1.3bn of commitments and a European technology ventures fund with US$272m in commitments. Doughty Hanson is headquartered in London and is supported by a pan-European network of regional offices in Frankfurt, Luxembourg, Madrid, Milan, Munich, Paris and Stockholm. The group employs 48 investment professionals in its offices in Europe, including a 26-member private equity team, a 15-member real estate team and a seven-member technology team.