European buyout firm Candover has closed its Candover 2001 Fund, with total commitments exceeding the original target of E2.5bn to close at E2.7bn.
The fund has been raised from around 110 investors groups worldwide, with the firm adding that 65 per cent of these were existing investors. Major investors include the California Public Employees’ Retirement System (CalPERS), Harbourvest, Swiss Re and funds managed by UBS AG, Pantheon and Standard Life. The Canada Pension Plan Investment Board announced in April that it had committed E100m to the fund.
The latest fund is double the size of the firm’s previous fund, Candover 1997, which closed at E1.3bn and is now fully invested, having already completed five exits including the recent E185m disposal of Diamant Boart to Electrolux AB. Speaking for Candover, head of investor relations Helen Walsh said that despite taking longer than expected, the fund had proved popular with investors. “2001 proved to be a testing time for fundraising, with many firms seeing their asset allocations derailed following the events of September 11. But this year has seen a strong pickup in interest allowing us to close ahead of target.”
The 2001 Fund will continue Candover’s strategy of investing in large European buyouts, with up to 50 per cent of the fund earmarked for investment in continental transactions. It will look to make up to five investments per year over a five-year investment period. “The larger size of this fund merely reflects the increase in opportunities in Europe,” added Walsh. “There is no shift in policy for this fund and our strategy will follow that taken through the 1997 fund.”
The firm is looking for opportunities in France, Germany and Benelux. A new office in Germany is to be opened at the end of the year to add to the firm’s office in Paris, which was set up in 2001. According to Walsh, the French market is currently more attractive than Germany and the UK. “France is presenting us with very good deal flow at the moment and the market is slightly less competitive [than in Germany and the UK]. We are looking to avoid the auction process in Germany and will be pursuing less transparent opportunities in this market.”
The fund has already invested in two transactions with a combined enterprise value of more than E1bn. In February, it backed the E393m acquisition of Swissport, a ground handling business, from Swissair Group AG, and in May, the firm launched a E709m (£448m) equity syndicate backing the formation of Wellington Re alongside Blackstone.
Placement agents for the Candover 2001 Fund were UBS Warburg for Europe, the Middle East and Asia Pacific and Benedetto, Gartland and Co. for North America. Legal advisors were Clifford Chance.
Since its formation in 1980, Candover has invested in 112 buyouts with an aggregate value of over E17bn. Candover has exited from over 80 per cent of these investments, resulting in gross realised IRR of 42 per cent over 21 years.