Barclays spin-out Equistone nears first close

Barclays Private Equity is to re-brand as Equistone Partners Europe when its long-expected spin-out completes later this year.

Barclays Private Equity, in the process of raising what will become its first independent fund, plans to hold a first close at the same time as formally announcing the spin-out, a source with knowledge of the firm said.

The spin-out, formal announcement of the new name Equistone Partners Europe and official first close are likely to happen within the next three months.

The vehicle, Equistone European Fund IV, is targeting €1.5 billion in commitments and is not expected to feature a commitment from former parent Barclays. The private placement memorandum was sent to investors in March and a “good number” of existing BPE investors are understood to have re-upped, a source with knowledge of the process said. BPE declined to comment on the fundraising.

A Lazard Frères team led by managing director Ben Sullivan is the fund's placement agent.

A pre-marketing document sent to LPs before fundraising began revealed BPE’s three existing funds have together generated a 3.2x multiple and a gross internal rate of return of 59 percent on fully exited investments. The BPE team is led by co-heads Paul Goodson (London), Gonzague de Blignières (Paris), and Peter Hammermann (Munich).

As with most spin-outs, finding a suitable name for the new GP can be a taxing process. The BPE team is understood to have settled on Equistone Partners Europe after satisfying themselves that it was appropriate for its pan-European LP base.

In the US, there is already an Equistone Partners in existence – the company is a commercial real estate group based in California. In the UK, Equi Stone is an equestrian products company, which is fortunately unlikely to be confused with the new private equity house.