Apax Partners closes $7.5bn fund

The global private equity firm has closed its eighth vehicle, coming in well below its original $11.9bn target.

Amid a tough fundraising climate, Apax Fund VIII closed on $7.5 billion on Friday, according to a statement from the firm.

The fund’s original target was $11.9 billion (€9 billion), but in December Apax Partners recognised that this target was unattainable, Private Equity International reported at the time. Fund VIII was launched in May 2011.
 
More than 40 percent of the commitments came from North American investors; a quarter came from Europe and the remainder from Asia, the Middle East and Latin America. The firm received approximately €900 million in commitments from three sovereign wealth funds that bought stakes in the management company—China Investment Corporation, the Government of Singapore Investment Corporation and Future Fund.

The general partner contributed about €450 million to the vehicle, a source told PEI in a prior interview. 
 
Apax did not offer any kind of early-bird discount to get LPs into the first close, but did move to share 100 percent of transaction fees with investors.
 
Fund VIII held a first close on $5.6 billion in March 2012. The firm closed its Fund VII on €11.2 billion in 2007.

The performance of Fund VII was an issue for some LPs, when they considered committing to Fund VIII, LPs told PEI. The fund had generated a 3.82 percent internal rate of return as of 30 September 2012, according to performance information from the California State Teachers’ Retirement System.
 
Apax has experienced some turnover over the years, cutting 10 percent of its investment professional staff earlier this year. In April, Apax decided to merge its media group with other sector teams, in an effort to move away from traditional media investments and focus on digital media opportunities and also integrate digital knowledge across its sectors.
 
The London-based firm has also reduced the number of brick and mortar offices. The Milan office closed at the end of last year and its Barcelona bureau started to shut down this spring. Its headquarters is also slimming down, with the firm planning to sub-lease two of its five floors.

However, Apax also plans to open an office in Brazil, PEI reported in March. The Sao Paulo office will be led by Walter Piacsek, a partner who joined at the end of 2012 to lead Apax's efforts in Brazil and South America. 

Apax’s fundraising is in sharp contrast to that of fellow UK-based shop CVC Capital Partners, which is expected to hold a first close at the end of this month, or in early July, on €7 billion, after launching earlier this year, sources told PEI in prior interviews. 

Cinven closed it Fifth European Buyout Fund in March on €5 billion, while Permira held a first close in April on €2.2 billion after 19 months in the market. Permira is targeting €4 billion to €5 billion.