Inflexion raises 165m buyout fund

Inflexion Private Equity, a UK mid-market private equity firm, has held a final close on its 2006 Buyout Fund with £165m of commitments.

Simon Turner, managing partner at Inflexion Private Equity, said that marketing for the vehicle began in April with a first close held on £110m after just six weeks. “We had a target of £125 million, but we got such strong support from our investors we decided to take a little bit longer to hit our hard cap of £165 million,” said Turner.

Turner confirmed that all limited investors in its previous its €150m 2003 fund returned for the new vehicle with increased allocations, including Nordea, London Merchant Securities, Foreign & Colonial Asset Management. There were 14 “blue chip” institutional investors in total from the UK, Europe and the US, including pension funds and funds of funds. Turner said that of the 14 limited partners, four were based in the US.

No placement agent was used for the fundraising, which brings Inflexion Private Equity’s funds under management to more than £300m. “We haven’t used a placement agent before and as this wasn’t a huge fund and we were confident of existing investors re-upping, we decided to do it ourselves,” he said.

The 2006 Buyout Fund is yet to make any investments. Turner said that the firm is currently “finishing off investing” from its £80m 2003 fund, which made eight investments in total. The fund has made two exits to date: ACIS, sold to The Carlyle Group for a reported £60m this month; and Ster Century Cinemas, sold in July 2004 after just 11 months of ownership for a 3.2 times return.

Despite the increase in fund size, Turner said that there would be no change in investment strategy. “To some extent, the previous fund was a bit undersized as it was actually a £40m fund with a £40m co-investment pool,” he said. “We co-invested quite heavily in the previous fund, so with the new fund we are moving to match the same investment level but using less co-investment.”