BC Partners launches €7bn Fund X

The firm has sent a PPM to investors for its latest vehicle.

Pan-European firm BC Partners has formally started fundraising for its tenth vehicle targeting €7 billion, Private Equity International has learnt.

The firm has sent out a private placement memorandum to investors for BC European Capital X, according to sources with knowledge of the situation.

Its previous vehicle, BC European Capital IX, raised €6.7 billion in 2010 and is still investing, according to PEI Research & Analytics.

Investors in that fund include the California State Teachers’ Retirement System (CalSTRS), which committed $256 million, the Canada Pension Plan Investment Board (CPPIB), CDPQ, and the New York State Teachers’ Retirement System.

BCEC IX had generated an internal rate of return of 1.06 percent for CalSTRS as of March 2015 since inception, according to the pension fund’s last published private equity fund performance figures. BC European Capital VIII, a €5.9 billion, 2005-vintage vehicle to which the pension system committed $604 million, had generated an IRR of 4.11 percent as of March last year.

The firm’s eighth and ninth funds together have generated proceeds of more than €3.5 billion over the 12 months to June 2015, a source familiar with the situation said. The net IRR was 10 percent for BCEC IX and 6 percent for BCEC VIII as of 30 September.

In June, the firm exited German laboratory operator Synlab to Cinven for €1.7 billion, generating a 2.7x return, and its remaining stake in UK real estate agents Foxton’s, generating a 2.9x return. In May BCEC IX partially exited US cable operator Suddenlink, in which it held a 70 percent stake alongside CPPIB, in a transaction that valued the company at $9.1 billion and generated a 2.3x return.

BC Partners declined to comment.

The firm invested €310 million in Italian restaurant chain Cigierre in November, in a transaction that completed this month. In October, BC Partners acquired a majority stake in Netherlands-based plant and flower grower Dümmen Orange from H2 Equity Partners and the Dümmen family, as reported by PEI. The €500 million transaction was the firm’s first agri investment in 15 years.

It followed the firm’s acquisition of a majority stake in UK restaurant chain Côte Restaurants in July for about £250 million ($361 million; €332 million) . The portfolio company announced its first add-on investment this month with the acquisition of UK restaurant brands Jackson & Rye and Limeyard from their founders.

In May, the firm acquired Athens based pharmaceutical company Pharmathen for about €500 million, as reported by PEI.

BC Partners is one of a number of pan-European funds currently in market. Among others, Cinven has begun fundraising for its sixth vehicle, according to one source. Apax Partners has launched its ninth vehicle targeting $7.5 billion and AnaCap Financial Partners is targeting €900 million and held an interim close on €700 million in the summer, as reported by PEI.