Charterhouse to launch E3bn fund

The UK’s longest-established buyout operator is looking to raise E3bn for its seventh LBO fund to invest in Western Europe.

Charterhouse Development Capital (CDC), the London-based buyout house whose origins date back to 1934, has announced plans to launch Charterhouse Capital Partners VII, a E3bn fund to invest in the UK and Western Continental Europe.

The fund is expecting to make equity investment between E200m and E450m in Western European Companies. CDC’s latest deal was the purchase, alongside French house CDC Equity Capital, of Alstom Contracting, the electrical engineering and services division of the Alstom Group, in a E770m transaction in May 2001.

CDC currently has nine unrealised investments on its books. Its two previous funds, CCP V and VI, invested around E1.4bn in private equity deals from which it generated a cash return multiple of 3.5x before carried interest and fees, according to sources close to the firm.

CDC was part of the HSBC Group until 2001 when it completed its own buyout in a deal led by Gordon Bonnyman, who joined the firm in 1990. The firm is now wholly owned by its employees.

CDC, which has made few investments in recent years, said the timing was favourable to launch a new fund. Speaking to the Financial Times, Bonnyman said: “We’ve seen the rain come on before, which those who have only been in the business since the early 1990s have not”, suggesting the firm and its team were sufficiently experienced to make investments in the current market climate.