Candover has succeeded in raising e1.1 billion for its 2001 Fund.
The fund’s final close, at a total target of e2.5 billion, is expectedbefore year-end.
The 2001 fund, launched in January, will continue the firm’s investment policy targeting buyouts of e100 million to e1.5 billion in the UK and Europe. Over the next four years around half of the fund will be invested in continental European transactions such as the
e920 million MBO of Picard Surgeles completed by Candover in February this year. The sectors favoured by the UK VC are media, manufacturing and engineering, financial services, chemicals, support services, consumer and IT.
Much of the capital comes from Candover’s previous investors, and institutions on both sides of the Atlantic have committed to the fund. They include the California Public Employees’ Retirement System, Massachusetts Institute of Technology, Metropolitan Museum of Art and funds managed by Standard Life and UBS. Marek Gumienny, joint managing director of Candover, said: “The popularity and awareness of private equity amongst investors keen to maximise returns from their assets is rising, particularly in Europe.”
According to Colin Buffin, joint managing director, the success of this closing can be attributed to the firm’s track record. Candover boasts a gross realised IRR of 45 per cent over the 21 years since the firm was established. This is the company’s seventh fund, bringing its capital under management to around e4 billion. The Candover 1997 Fund raised e1.4 billion, around 90 per cent of which has been invested. Previous funds in 1989 and 1994 each raised around e490 million.
Fund raising conditions are so tough in the US that established houses have been forced to scale back the target sizes of their funds. Buyout firm Hicks, Muse, Tate and Furst announced that it would close its latest fund at between $2 billion and $2.5 billion, $1 billion short of the original target.
Buffin is optimistic about the buyout climate in Europe. He said: “The deal pipeline for the new fund looks very healthy, the environment for making investments over the next 12 months is good and we are looking forward to putting the fund to work.”