Barclay’s first non-captive fund ahead of target

Barclays Private Equity has held a first closing north of E1bn for its new European buyout fund.

Barclays Private Equity (BPE), the private equity division of Barclays Capital, has held a first closing on more than E1bn in its first formal fundraising effort since 1989.

The fund received over E400m in commitments from third parties, having hoped to secure no more than E250m from external investors at this stage. 16 institutions committed to the fund including Bank of Scotland, Citigroup Private Equity, Standard Life Investments and NIB Private Equity. Barclays contributed E545m to the fund, and UK fund of funds Parallel Ventures, which has had a close relationship with BPE since the mid 1990s, committed E100m.

According to Simon Henderson, a director at BPE, third party investors had quickly become comfortable with the proposition despite the fact that the firm had not formally raised capital from institutions since 1989. Investors were impressed with BPE’s “first rate” investment track record, its focus on the European track record and its past performance on the continent, he said.

BPE invests in mid-market buyouts ranging in value from E15m to over E400m. Recent deals include the E75m buyout of COSi in the UK, the E16m MBO of CER in Italy, the E73m buyout of Eau Ecarlate in France and the Minimax transaction in Germany.

BPE was among the first Anglo-Saxon private equity houses to set up in France, where the firm has been investing since 1990. “The French team have performed superbly, making a significant contribution to our IRR”, said Henderson. A German office was opened in 1998, which has since made four investments, two of which are in line for realisations this year. The Milan office is also performing well, according to Henderson.

The European Fund received legal advice from SJ Berwin. It will hold a final close later this year. BPE does not intend to significantly exceed its target amount of E1.2bn.