Barclays spinout holds €500m first close

Equistone Partners Europe, which successfully completed its spinout from Barclays Capital on Friday, is understood to have held a first close for its first independent fund on about €500 million.

Barclays Private Equity completed its long-awaited spinout on Friday, rebranding as Equistone Partners Europe. The team, led by managing partner Guillaume Jacqueau, is also understood to have held a first close for its maiden fund as an independent group on about €500 million, according to investor sources. Equistone declined to comment about the fundraising.

The team is targeting €1.5 billion for the fund, called Equistone European Fund IV. It began fundraising in March, when the fund’s PPM was dispatched to investors. A “good number” of Barclays Private Equity investors have backed the Equistone vehicle, according to a source close to the process.  A Lazard Frères team led by managing director Ben Sullivan has helped to place the fund.

As part of the spinout, Equistone will take over the management of Barclays Private Equity’s three buyout funds, BPE Funds I, II and III. Those funds have together generated a 3.2x multiple and a gross IRR of 59 percent on fully exited investments, according to a pre-marketing document for the Equistone fund. Barclays bank remains invested in those vehicles, Equistone said in a statement.

Equistone will continue to pursue the same strategy as that of its forbear, targeting deals in the €50 million to €300 million range, the firm said. It will also continue to operate from its six offices in France, Germany, Switzerland and the UK, and maintains its 35-strong team of investment professionals.

Managing partner Guillaume Jacqueau said in a statement: “Our team’s successful investment track record has been established over many years by a consistent focus on identifying and partnering with winning management teams in the European mid-market to achieve long term growth and impressive returns for our investors. This means Equistone is well positioned from the outset to capitalise on continuing investment opportunities in Western Europe as an independent investment firm.”

The spinout comes as many banks seek to offload non-core assets, particularly those involved in alternative asset classes like private equity, to comply with forthcoming regulation. Barclays said the sale of BPE was not expected to have a material impact on its earnings per share or its capital ratios.