HgCapital raises nearly $2B

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 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 firm began raising the fund in October with a goal of $1.3 billion. The firm says that the fund is backed by 50 limited partners, including new institutional and and individual investors. LPs 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.

London-based HgCapital, formerly known as Mercury Private Equity, was the private equity arm of Merrill Lynch and spun out in 2000. HgCapital raised its last fund in 2000 with $774 million, according to Thomson Financial (publisher of PE Week).

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.