Advent pushes cap on Fund VII to €8.5bn

The firm has enjoyed strong demand from the LP community for its seventh investment vehicle, which is said to be set to close around year's end.

Advent International is boosting the cap on its seventh fund from €8 billion to €8.5 billion to make room for some additional investors, according to two limited partners with knowledge of the cap increase.

The raised cap will push the final close for Advent Global Private Equity Fund VII to around the end of the year, the LPs said. Dow Jones first reported on the cap increase. The firm declined to comment about fundraising.

Advent has enjoyed high demand from the LP community for Fund VII as the firm has posted a strong track record through its fund series, and including in some of its separate, emerging markets-focused funds. While many firms, especially mega-funds, have struggled in the challenging environment for LP capital, Advent is one of the rare few that could close marketing on the vehicle in less than a year.

In fact, some LPs expected Fund VII to close in the third quarter, but the fund cap boost has pushed the final closing back.

However, one LP said Advent has yet to really prove itself with its larger investment vehicles. Advent’s sixth fund, which closed in 2008 on €6.6 billion, was generating a total value multiple of 1.2x and a net internal rate of return of about 13 percent as of 31 March, according to performance information from the Washington State Investment Board. Performance on the fund has gradually improved this year; Fund VI was generating a 6.88 percent IRR as of 31 December, according to Washington’s information.

Advent’s global private equity series targets upper mid-market investments in North America and Western Europe. The firm focuses on five core sectors – business and financial services, healthcare, industrial, retail/consumer and technology, media and telecoms. Advent also has a diverse series of funds for various geographies. In 2010, the firm closed its $1.65 billion Latin America fund, one of the largest in the region.

Advent has announced a spate of deals recently, including acquiring KMD, a Danish IT company, from EQT and ATP earlier this month, as well as making an offer for Douglas, a German perfume business. The firm also announced a $1.15 billion investment in the coating resins division of NYSE-listed Cytec Industries this month.