Second HSBC fund nears closing

HSBC’s second European buyout fund has reached a first close at GBP490 million with a final close of GBP600 million scheduled for the end of March. HSBC Group will match investor commitments, bringing the fund up to GBP1.2 billion for investments in European buyouts.

The fund launched in July last year. Nine out of the ten institutional investors from the first HSBC Private Equity Partnership Scheme, which raised GBP1.1 billion, have reinvested. The tenth investor will also be joining the round shortly. A number of new institutional investors have also committed to the fund, as well as HSBC Republic, the international private banking division of HSBC, which has allocated GBP50 million to the fund.

The fund will have a similar focus to its predecessor focusing on generalist buyouts of companies across Europe with enterprise values of between GBP50 million and GBP500 million. The first fund is already fully committed in 55 investments, of which 35 have been realised.

HSBC recently merged its venture capital arm, HSBC Ventures, with HSBC Private Equity. The merger, which took effect on January 1, is aimed at developing the group’s mid-market presence, focusing on deals worth between GBP2 million and GBP10 million, particularly in the UK, which previously fell between the remit of the two groups.