HSBC has closed its latest private equity offering HSBC European Private Equity Syndicate II, with commitments of over E245m, well in excess of its E100m target, (see EVCJ June 2005, page 11.)
The fund is a successor vehicle to HSBC Republic European Private Equity Syndicate, which raised £58.5m. HSBC European Private Equity Syndicate II will give high net worth (HNW) individuals access to Montagu III, which is the latest E2bn buyout fund being raised by Montagu Private Equity since the majority of HSBC European Private Equity Syndicate II will be invested in Montagu III.
The fund’s objective is to achieve a high rate of return for investors from a combination of capital and income returns by taking controlling equity interests in unquoted companies, primarily through management buyouts in North Western Europe.
Access to mid-market private equity funds such as Montagu Private Equity is restricted for private individuals simply because such funds seek commitments from their investors in the tens of millions. However, HSBC European Private Equity Syndicate II has raised over E245m and so is attractive to Montagu Private Equity in that it will act as one investor, and the administrative burden created by the sheer number of investors that will be behind the syndicate rests with the syndicate manager HSBC.
Jamie Murray, head of marketing, HSBC Republic Investments Limited, says: “The success of the launch of HSBC European Private Equity Syndicate II demonstrates that investors’ appetite for private equity is growing. Montagu believes that there are a number of attractive investment opportunities in the target market with a good volume of quality transactions available. These opportunities may help to deliver higher absolute returns for investors, whilst also providing portfolio diversification.”