Summit closes Europe and debt funds

Summit Partners, a Boston, Palo Alto and London-based private equity firm, has raised €1bn for its first European fund and a further US$825m for its fourth subordinated debt fund.

Since its inception in 1984, Summit has made European investments from its global funds and they will continue to be used in conjunction with the new vehicles, bringing Summit Partners’ total available capital for investment in growth companies across Europe, North America and Asia to almost US$6bn.

Summit Partners opened an office in London in 2001 and has since made eight investments in seven European companies, including UK loudspeaker manufacturer B&W Loudspeakers; Dublin-based hotel booking and reservations technology provider Web Reservations International; and Jamba!, a Berlin-based wireless content services provider acquired as part of a US$40m recapitalisation in 2003 and sold the following year to VeriSign for US$274m.

The most recent acquisitions were, a French members-only retail start-up in which Summit acquired a 20% stake; and Welltec International, a Danish provider of precision robotic solutions for oil and gas wells. Both deals were completed in 2007.

The subordinated debt fund will co-invest with Summit’s equity funds, targeting equity commitments of US$5m to more than US$500m per transaction, with the ability to invest more than US$800m in combined equity and subordinated debt.

“The subordinated debt fund allows us to provide companies with a single source of financing for equity and debt financing needs,” said Tom Roberts, a managing director at Summit. “This gives entrepreneurs access to two-thirds of the capital structure, excluding senior debt, in a single relationship.”

Limited partners in the European equity fund included BP Investment Management, HarbourVest Partners, Irish National Pensions Reserve Fund and LGT Capital Partners.

Investors that committed capital to the subordinated debt fund included California State Teachers’ Retirement System, Minnesota State Board of Investment, Performance Equity Management and Virginia Retirement System.

Summit said that nearly 80% of the capital raised in the two funds had come from returning investors.