BPE: €950m from third parties in two months

Following a formal launch in December, Barclays Private Equity has closed its second European mid-market fund on €1.65bn including a €700m anchor investment from parent Barclays Bank.

Mid-market pan-European private equity firm Barclays Private Equity (BPE) has announced a first and final close of its second fund on €1.65 billion ($2.1 billion).

The new fund was officially launched in December 2004 and exceeded its original target of €1.4 billion, thanks to strong investor demand.

BPE received a €700 million cornerstone investment from parent Barclays Bank and another  €950 million from 26 institutional investors from Europe, the Middle East, Far East and the US.

The majority of the limited partners in the fund are return investors. BPE investor relations director Brian Blakemore told PEO: “Most investors re-upped at the same or a higher level and we had a total of five new investors.” New investors include Gartmore Investment Management, SPF Private Equity CV and Swiss Re Private Equity Partners.

Other investors include Allianz Private Equity Partners, AlpInvest, SVG Diamond, West Yorkshire Pension Fund, Morley Fund Management, Pantheon Ventures and Standard Life Investments.

Commenting on investor reaction to the fund, Blakemore said: 'From our pre-marketing, we expected a positive response, but the speed of the close surprised us. I think it's down to our excellent track record, consistent investment strategy and a very stable, experienced team.'

Doug Miller of International Private Equity Limited acted as placement agent for the fund. Clifford Chance acted as legal advisors.

BPE’s first fund, which closed on €1.25 billion in 2002, is over 80 percent committed at this stage and has returned more than 35 percent of drawn down capital to investors, according to a statement. With a strong pipeline of deals, Blakemore said he expected the first fund to be fully invested “within the next month”.

Fund II will follow the same investment strategy as its predecessor, investing in mid-market buyouts in France, Germany, Italy and the UK, in deals with an enterprise value of between €25 million and €250 million.

The speed of BPE’s fundraising contrasts with the fortunes of other private equity houses recently in the market. At the end of January, UK firm Doughty Hanson closed its latest buyout fund on €1.6 billion, short of its €2 billion target, more than two years after its launch.

Last week, Nordic private equity firm Industri Kapital announced the final close of its fifth buyout fund on €825 million, short of the original €2.5 billion target that was published when the fund launched in 2002.