Advent International, which set an initial target of $625 million for its most recent international vehicle, Global Private Equity III (GPE III), is closing the fund on $1 billion (ecu 898 million). Director Will Schmidt said the $950 million cap set at the first closing was revised upwards “to accommodate additional interest from three or four international investors”.
Some 40 institutions signed up for the fund. Around 80% of the capital was raised from US sources, with most of the balance coming from European investors. Participants include PGGM and ABP of the Netherlands, which committed $100 million and $50 million respectively, the IBM Retirement Fund and GE Capital.
Will Schmidt confirmed that there was substantial demand for co-investment opportunities from participants in GPE III and said that six or seven institutions were likely to be active co-investors. He added that Advent International offers co-investment opportunities to investors on a flexible basis rather than via a fixed pro rata programme.
Fifty per cent or more of GPE III is likely to be invested in buyouts, compared with around a third of Advent International’s previous global funds. GPE III’s primary geographic focus will be on Western Europe, where just under 50% of the fund will be invested. In the light of current UK conditions and the better value to be found in Continental markets at present, Advent expects to invest 65-70% of the European portion outside the UK.
A further 35% of the fund will be invested in North America and the balance in South East Asia. Will Schmidt said that despite recent events in South East Asia: “It could well turn out that now is a good time to invest in Asia, like the early 1990s in the UK”.
To date this year, Advent has led European deals with a total value of around $675 million including: the FFr 2.8 billion (ecu 423 million) buyout of HRC (EVCJ, October/November 1997, page 24); Trinity Pharmaceuticals; Marr; LDI; Alta Gestion; and, most recently, PEMCO. This year has also been an active one for Advent International on the European exits front: realisations include: Vision Express, which was sold to GrandOptical PhotoService; Colofon, sold to Reed Elsevier; Miracle Garden Care, sold to Scotts of the USA; and Eversholt Holdings, sold to Forward Trust. Another investee, @Entertainment, recently raised $200 million through a Nasdaq IPO.
The closing of GPE III brings funds under management by Advent International to over $3 billion. The group’s next major fund raising exercise, targeting $150 million or more for a successor fund to its Central and Eastern European regional fund, will get under way before the end of the year.