- Mid-market buyout house TDR Capital has closed its second fund on €1.75bn. TDR Capital II will follow a similar investment strategy to its predecessor TDR Capital I which closed on €550m in 2002, and counts among its investments Gondola Holdings, the holding company of the Pizza Express, ASK and Zizzi restaurant chains. All the institutional investors in the first fund reinvested. Lazard acted as sole placement agent.
- Babson Capital, the UK leveraged loan manager and Duke Street CDO spin-out, has closed Almack Mezzanine I, Europe’s first dedicated mezzanine fund, on €800m. Following a first close in November 2005 at €251m, the investment strategy will see Almack target both large and mid-market mezzanine investments in the UK and Continental Europe. The fund has already invested €348m since its launch in 2005, and according to Babson has a strong pipeline for Q3 2006.
Danske Private Equity has reached a final closing on Danske Private Equity Partners III on the original hard cap of €600m.
The amount was raised from institutions in the Nordic countries. Companies within the Danske Bank Group have committed approximately 20% of Danske PEP III with the remainder coming from third party clients. Danske PEP III will follow a similar investment strategy to Danske Private Equity Partners I and II, PEP III investing in privately held small and mid-size companies, through a portfolio consisting of mid-market buyout and venture funds in North America and Western Europe.
French buyout specialist Eurazeo has launched a €500m co-investment fund, holding a first closing on €345m. A final closing is anticipated for the end of 2006.
- Orthogonal Partners, a venture set up by former members of the Sainsbury family office, is launching its first investment vehicle to create a globally diversified portfolio of assets. The funds’ objective is to achieve returns of between 15% and 20% net IRR and is expected to have a size of $200m. The fund will invest in both private equity and hedge funds.
The founding partners are Romek Pawlowicz, Ahmet Ismael and Dan Gore who were all previously part of the Sainsbury family office. Senior partner, Romek Pawlowicz has more than 22 years of investment experience across all asset classes having worked previously for the Rausing family office, CSAM, GAM and Laurentian Life. As head of listed and alternative assets at the Sainsbury family office, Pawlowicz successfully invested in managers across the investment spectrum. He also sat on the advisory and research boards of the Centre for Hedge Fund Research, London Business School.
Pawlowicz said: “This is an interesting time for investors. There is a wall of money chasing conventional asset classes. This is likely to lead to lower returns and increased risks. We believe investors need to target new areas where there are greater inefficiencies and barriers to entry. Family offices and endowments were early adopters to the now mainstream alternatives of private equity and hedge funds. They enjoyed extraordinary returns throughout the 1990s. We believe that by targeting new sources of returns, we can deliver similar first mover rewards for our investors.”