3i romps to first close of €4.3bn

Europe’s largest quoted private equity manager has stopped marketing its latest fund after a swift first round with investors lining up to take the company to its final target of €5bn.

3i, Europe’s largest quoted private equity and venture capital company, has held a first closing of its latest buyout fund, Eurofund V, on €4.3 billion ($5.5 billion).

The amount committed to date is well beyond the initial intended target of €3.5bn. The fund’s final close is due in the autumn and is capped at €5bn.

Russell: not looking for new investors.

Jonathan Russell, managing partner and head of 3i Buyouts said: “The truth is that it is all accounted for. We are not out looking for new investors. It is just a question of timing.” He said 3i had not pursued a massive marketing process.

“We focused our shots on people we had spent time getting to know,” he said. About 50 investors committed to the first close, with a number of new investors from the US and the Gulf. Russell said: “In the past our investor base has had a European bias. This time we were looking for a good geographic diversity of blue chip investors.”

More than 80 percent of investors in the previous fund returned to commit more money to the new venture. UBS advised 3i on the fundraising, which formally launched toward the end of April.

The first closing’s success is in marked contrast to 3i’s fundraising two years ago when the group had to contribute €2.2bn of its own money, after outside investors initially committed €880m, €670m less than 3i had planned for.

A subsequent secondary offering of the 2004 fund brought €200m of commitments from outside investors, including alternative asset manager Partners Group.

A string of strong performances have helped the group turn around its fundraising fortunes, including recently the sale of: German generic prescription drugs distributor, betapharm; own-label Dutch fruit juice business, Refresco and Swedish clothing, home and accessories retailer Gant.

3i’s European buyout business is the largest in the European mid-market with around €8 billion in funds under management. The business invests in transactions up to €1bn in all sectors.

Russell said in a statement: “This fund reinforces our position. As many players leave the mid-market in search of large-end transactions, 3i Buyouts’ opportunity increases.”

Eurofund V will be invested in around 50 investments across Europe over approximately four years and at €5bn, will be the largest fund focused on the mid-market.

Separately 3i has appointed Hannu Isohaaro as country manager of 3i Nordic Finland. Ere Kariola, 3i’s former head of the Finnish business, has moved to a new role as senior advisor of 3i Nordic.