Bridgepoint has sought a 12-month fund extension for its current €4.84 billion Bridgepoint Europe IV after it became apparent it would not need to fund as many add-on acquisitions as initially planned, Private Equity International has learned.
Bridgepoint declined to comment.
The 2008-vintage fund's 19 portfolio companies have so far made 54 add-on acquisitions totalling €750 million, only four of which required equity (some €130 million) from the fund.
Bridgepoint therefore decided to increase the proportion of the fund allocated to primary investments to between 90 and 95 percent, instead of the originally planned 85 percent. The firm is expected to make an additional four to five primary investments as a result.
The London-headquartered firm has been consulting investors about the plan over the last few months, with many said to be “very supportive”, according to a source. LPs are expected to approve the fund extension at the beginning of August.
In line with market terms for extensions, Bridgepoint will not charge management fees on committed capital in the extension period but only on invested capital.
Fund IV was generating a 9.4 percent internal rate of return and a 1.2x multiple as of the end of 2012, according to performance data from the California Public Employees' Retirement System.
Bridgepoint's most recent acquisition was in May, when it purchased The Flexitallic Group, a specialist producer of sealing product technology for the oil, gas and energy sectors, from Paris-listed Eurazeo, for €450 million. Following that investment, its Fund IV was 75 percent deployed.
Market sources expect the firm to raise a successor fund sometime next year.