BDC seeks £500m for Fund III – Exclusive

The small-cap arm of pan-European firm Bridgepoint is already seeing strong investor demand for its latest offering.

Bridgepoint Development Capital, the small-cap arm of pan-European firm Bridgepoint, has launched fundraising for its third vehicle, Private Equity International has learned.

Bridgepoint Development Capital III has a target of £500 million (€639 million; $723 million), according to investor sources.

It is understood that there has been strong early investor demand for the vehicle.
Bridgepoint declined to comment on the fundraising.

The fund will be considerably larger than its predecessor, which closed on €353 million, according to PEI Research & Analytics. Investors in that fund include the European Investment Fund, The Royal Bank of Scotland Group Pension Fund and the School Employees’ Retirement System of Ohio.

BDC invests in businesses headquartered in France, the Nordic region and the UK, with buyouts typically valued up to €150 million. Its team of 24 investment professionals operate from its offices in London, Paris and Stockholm.

On Wednesday BDC completed the sale of its majority stake in Swedish transport management software business Unifaun Group, formerly known as Memnon Networks, to Vitruvian Partners. Under BDC’s ownership Unifaun’s revenues doubled and it expanded its geographical reach.

BDC acquired the business in 2012 using capital from both Fund II and the first BDC vehicle. Unifaun connects shippers of goods, carriers and end-customers, enabling the parties to automate the exchange of transportation data. It currently serves a customer base of more than 100,000 companies, according to a statement from BDC.

In April BDC offloaded UK-based aeroplane parts manufacturer Shimtech to Inflexion and Auctus industries for $220 million, generating a 3x return and an internal rate of return of 37 percent, as reported by PEI.

Other divestments by BDC in 2015 include French holiday parts operator Siblu, which it sold to Sterling Square Capital Partners, and Quotient Clinical, a provider of outsourced, early-stage drug development services to the pharmaceutical industry, which it sold to healthcare specialist GHO Capital.

BDC is still investing from Fund II, which is understood to have nine investments. There are two investments remaining in the £300 million first BDC fund.

Bridgepoint is also investing through its €4 billion, 2014-vintage Bridgepoint Europe V, its flagship vehicle which closed in March 2015 above its €3.5 billion target. The fund focuses on businesses valued between €200 million and €1 billion across Europe. In September Fund V acquired French medical technology company Balt for an undisclosed sum, as reported by PEI.