European middle market private equity got another vote of confidence last week as London-based HgCapital announced a final close on its latest private equity fund, HgCapital 5, with $1.7 billion. The firm says that the fund will focus on European middle market private equity deals, mostly in buyouts. The fund brings HgCapital’s total capital under management to $3 billion.
The fund had its final close last week after a first close in January with $1.5 billion. The fund initially launched last October with a goal of $1.3 billion. The firm says that the fund is backed by 50 limited partners, including new institutional investors and individual LPs. Institutional backers of HgCapital 5 include Gartmore Investment, Goldman Sachs, Harvard Management Co., Finland’s Ilmarinen Mutual Pension Insurance Company, LGT Capital Partners, Metlife, Morley Funds Management, Pantheon Ventures, Rolls Royce, Standard Life and the Teachers Retirement System of Texas.
Partner Craig Donaldson said in the firm’s announcement that the fund, HgCapital’s second as an independent firm, has seen the firm’s limited partner base diversify by size, geography and LP type. HgCapital, formerly known as Mercury Private Equity, was the private equity arm of Merrill Lynch and spun out in 2000. According to Thomson Financial (publisher of Buyouts), HgCapital raised its last fund in 2000 with $774 million.
Well before it officially launched HgCapital 5, the firm was poised to expand its activity. About a year ago it announced five new investment professional appointments to expand its business in Germany and the Benelux region of Europe.
Credit Suisse First Boston served as the fund’s lone placement agent. SJ Berwin and Ropes & Gray served as the fund’s legal advisors. HgCapital is headquarters in London and has offices in Amsterdam and Frankfurt.