BC Partners within whisker of €6bn target

Buyout firm BC Partners has held a second close for its latest mega-fund just shy of its €6bn target, demonstrating that top tier firms are still able to attract significant amounts of capital despite a difficult fundraising environment.

BC Partners has raised almost €6 billion for BC European Capital IX, according to investor sources. The fund’s target size is €6 billion with a hard cap of €6.5 billion, the sources said.

BC’s previous fund, a 2005-vintage vehicle, raised €5.8 billion. It is 95 percent invested, with the remaining 5 percent set aside for follow-on investments according to a source close to the firm. Its last deal was the acquisition of French buyout firm PAI Partners’ stake in Italian retailer Gruppo Coin in May, a deal worth up to €930 million.

The London-headquartered firm held a first close for the new fund in March, having garnered €4 billion in commitments. Fundraising officially began in September last year.

Excellent, top-tier general partners can raise money in any market

An investor

An investor source commented: “Excellent, top-tier general partners can raise money in any market, even with punchy targets, and they can do so quickly on account of their track records.”

BC has built an in-house fundraising team in recent years, led by the former European head of financial sponsors at Goldman Sachs, Charlie Bott.  Law firm Simpson Thacher is advising on the fundraising.

Investors in the new fund include the Alaska Permanent Fund, the Los Angeles Fire & Police Pension System, and the Pennsylvania State Employees’ Retirement System. A sizeable, unnamed Asian LP is also understood to have committed to the fund.

LPs were encouraged to commit early by BC offering a 5 percent reduction on fees – a so-called “early-bird” discount – to those investors committing ahead of a first close.

The performance of BC’s previous vehicles will also have helped secure commitments. Its eighth buyout fund had generated an internal rate of return of 24.5 percent as of March 2010, for example.

No capital from the new fund has yet been deployed, although BC remains involved in several ongoing processes, according to a source with knowledge of the firm. These include the auction for Swedish cable company Com Hem, which could conclude as early as this week, despite firms including Nordic Capital and CVC Capital Partners withdrawing from the bidding. Cinven and BC are understood to be the only firms left in the process.